Answer:
$12.68
Explanation:
Interest is calculated using the formula below. As the consideration for this question is a single month, compounding interest does not need to be considered:
[tex]I = P(1+rt)-P[/tex]
where I is interest, P is the principal amount, r is the interest rate and t is the time of investment
APR is converted to monthly interest rate by dividing by 12 (for the number of months).
P = $ 845
r = 18% annually = 1.5% monthly
t = 1 month
[tex]I = P(1+rt)-P[/tex]
[tex]I = 845*(1+0.015*1)-845[/tex]
[tex]I = 845*(1.015)-845[/tex]
[tex]I = 857.675-845[/tex]
[tex]I = 12.68[/tex]
