Question

You owe $1,945.61 on a credit card that has an 11.2% APR. the minimum payment due is $156.00. you decide to pay $300.00. how much do you save in interest by paying more than the minimum, assuming you make both payments at the beginning of the month?

$,

Answer 1

$1.344

Explanation:

APR represents annual percentage rate, and it specifies the amount of interest that would accrue on a loan over a specified period.

Extra amount paid = $300 - $156 = $144

Annual interest that would have been paid on the extra $144 = $144 * 11.2/100= $16.128

this amount on monthly basis is $16.128/12 = $1.344

Answer 2

Paying an extra $300-156 = $144. Interest that you would have paid on $144 would have been 144 x 0.112 /12 = a savings of $1.34