Write an equation to model the situation

Question

Sarah is buying a new computer. She pays $800 with a credit card that charges 12.4% interest compound monthly.

Answer 1

Compound interest Formula

A=P(1+r/n)^nt

^where

1. ^{A= accumulation amount}
2. P=Initial amount
3. r=Interest rate
4. n=number of payment per period

In your problem

P=800

r=12.4%=0.124

n=12

Therefore, A=800(1+0.124/12)^12t