Felicia paid $2,879 for a new wall oven with her credit card. felicia’s credit card has an apr of 13.89%, compounded monthly. it took felicia seven years of identical monthly payments to pay for her oven, and she made no other purchases with her card until it was paid off. over the ten years that she kept the oven, it used an average of $2.97 per week in electricity. between the electricity and the interest, which component of the lifetime cost of the oven was greater, and how much greater was it? (round all dollar values to the nearest cent.) possible choices: a. )the interest cost $94.12 more than the electricity. b.) the interest cost $1,638.52 more than the electricity. c.) the electricity cost $1,334.60 more than the interest. d.) the electricity cost $463.32 more than the interest.

The answer is A, the interest will cost $94.12 more than the electricity.

Using $2.97 per week for electricity, 52 weeks a year, for 10 years, the total is given by:
2.97(52)(10)=1544.40.

To find the amount of interest she pays on the credit card we must first find the amount she must pay each month in order to pay it off in 7 years.  The formula for that is
, where P is the principal (amount borrowed), r is the rate per month (divide APR by 12), and m is the number of months she wants to pay it off in (7*12=84 for m).
We then have:

Her monthly payment is $53.78 per month.

Using that payment, we now have the formula to calculate the total amount of interest:
, where I is the interest, A is the monthly payment amount, n is the number of years to pay it off, and P is the amount currently on the card.  Our information then gives us:
I = 53.78(7)(12)-2879
=1638.52
The total interest she pays will be $1638.52.

The difference in the interest and electricity costs is 1638.32-1544.40=94.12.