Math for Liberal Arts - Finance

Question

Steve's credit card has 21% (annual) interest rate, compounded daily. If he has $3000 charged on the card and does not pay it the first month, and he has to pay interest for 14 days, how much interest does he pay?

Answer 1

Assuming the interest charge starts at the end of the month,

i = 3000(1 + 0.21/365)¹⁴ - 3000