Help with math problem

Question

Your credit card company just called to tell you that they have a new computer system and are changing all of their customers' accounts from compounded annually to compounded monthly. While they assure you that your new interest rate will not cost you any more money, you decide to rewrite the formula yourself to check if this is indeed true. You owe $600 at 27% compounded annually over 1 year and write the formula: A=600(1.27)t.

Which of the following shows the rewritten formula to find the new rate compounded monthly that you should expect from the credit card company?

What should your new annual percentage rate be?

Select two answers.

APR≈24%

A=600(0.105833)12t

A=600(1.12)12t

APR≈26%

A=600(1.02012)12t

APR≈22%

Answer 1

Since you're paying 27% annually; it comes to 2.25% monthly.

At the end of month #1 the new charge is an extra $13.5+600=$613.50.

If not touched for a year; you'd owe $783.63.

The formula I used is: fv=p*(1+int/c)^(n*t)

fv-future value

c-compound 12

p-principal 600

int-rate .27

n-#years 1

times per yr 12

From the choice; APR26% is the best one.