You take out a cash advance of $2,790.00 on a credit card with a 3.5% cash advance fee and a 13.5% APR. What is the amount due by the end of the month?

The first thing to consider is that when computing the APR for one month you must divide the interest rate by 12 since the 13.5% is based annually. 13.5% is equivalent to. 135 in decimal form. But then when we divide it by 12 we get, (.135) / 12 =.01125 which is your monthly interest rate versus your annual one. When multiplied by the amount of the cash advance you come up with the following fee: (principle) (monthly int. rate) = total interest charged for month ($2,790) (.01125) = $31.3875 The next thing to consider is the additional charge of the 3.5%. This is equivalent to. 035 in decimal form. When multiplied by the amount of the cash advance you come up with the following fee: (principle) (advance int. fee) = total cash advance fee ($2790) (.035) = $97.65 So the total amount due at the end of the month would be $2790 + $31.39 + $97.65 = $2919.04 after interest rates and the additional fee gets applied.