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Nicole used her credit card to buy a $1,255 mattress. Her credit card has an APR of 11.56%, compounded monthly, and the mattress was the only purchase on the card. Nicole paid off the mattress after two and a half years. If the sales tax in Nicole’s area is 9.08%, how much interest did Nicole pay in total? (Round all dollar values to the nearest cent.)

Respuesta :

Answer A-- 213.85 is the answer

Step-by-step explanation:

Nicole paid an interest of $456.20.

What is compound interest?

'Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on principal plus interest.'

According to the given problem,

The sales tax = 9.08% of $1,255:

⇒ 1255 *.0908= $113.954

The cost of the mattress is:

1255+113.954= $1368.954

Now we can consider:

P = $1368.954

r = 0.1156 or 11.56%

t = 2.5 years

n = 12*2.5 = 30

A = the future value

A = 1368.954[tex](1+\frac{0.1156}{12}^{(2.5*12)})[/tex]

A = $1825.15

The interest paid is the difference:

⇒ 1825.15 - 1368.954 = $456.20

⇒ $456.20 interest paid by Nicole.

Hence, we can conclude that Nicole paid $456.20 as interest.

Learn more about compound interest here:

https://brainly.com/question/14295570

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