Question

You owe $1,842.66 on a credit card at a 14.5% APR. You pay $250.00 at the beginning of the month and put another $250.00 in a savings account at a 4.0% APR. What is the difference in the amount of interest accrued between the credit card and savings account by the end of one month?

Answer 1

$18.41

Explanation:

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Answer 2

Credit Card: (1842.66 - 250) (.145/12) = $19.24 interest accumulated on credit card balance

Savings: 250(0.04/12) = $0.83 interest earned

Difference = 19.24 - 0.83 = $18.41 net interest owed