Question

You owe $1,240.24 on a credit card with a 13.75% APR. You decide to pay $250.00/month toward paying off the credit card. How much is the difference in the interest paid if you pay at the beginning of the month compared to paying at the end of the month?

Answer 1

If you pay at the beginning of the month, the balance on which interest is charged is $250 less than it would be if you paid at the end of the month. The difference is 1 month's interest on $250.

... I = P·r·t

... I = $250·0.1375·1/12

... I = $2.86

The difference in interest paid is $2.86 if you pay at the beginning of the month instead of the end.