Question

Tori had a $300 unpaid balance after last month's payment on her account. Her annual percentage rate is 21%. The minimum payment due is $25. How much of that is interest for one month on the unpaid balance?

Answer 1

$4.8125

Explanation:

Given that:

Unpaid balance = $300

Annual percentage rate (APR) = 21%

Minimum payment = $25

How much of it is interest for one month on a the unpaid balance

If the Annual percentage rate = 21% = 0.21

Monthly rate = 0.21 / 12 = 0.0175

Amount paid as interest on unpaid balance :

(unpaid balance - minimum payment) * monthly rate

($300 - $25) * 0.0175

$275 * 0.0175

= $4.8125