Question

A) You owe $1,032.56 on a credit card with an 11.25% APR. The minimum due is $150.00. What is the difference in the interest accrued if you pay the minimum amount due at the beginning of the month versus at the end of the month?

B) Using the credit card information from the previous problem, you decide to pay $300.00 instead of the $150.00 at the beginning of the month. How much do you save in interest by doubling the amount?

Answer 1

Aloha!
Step 1.Pay at the beginning $1,032 - $150= $882
Step 2. $882 multiplied by 1.00938= $890.27
Step 3. Pay at the end $1,032 multiplied by 1.00938=1,041.68
Step 4. $1,041.68 - $150= $891.68
$1.41 is the interest in the first month.

I hope this helps!
Adios!:)

Answer 2

Just took test, answers are:

A) 1.41

B) 1.40