Question

Marcia has two credit cards and would like to consolidate the two balances into one balance on the card with the lower interest rate. The table below shows the information about the two credit cards Marcia currently uses. Card A Card B Amount $1,389.47 $1,065.32 APR 16% 12% Monthly Payment $39.38 $28.05 After 4 years, approximately how much will Marcia have saved in interest by consolidating the two balances? a. $1,890.24 b. $133.92 c. $543.84 d. $1,346.40

Answer 1

b. $133.92

Explanation:

Around $133.92 percent, in this case Marcia has to start paying off higher rates on her credit cards, because with those monthly payments she will never be able to pay off those debts, cause the interests rates are higher than the actual monthly payment she is putting. But by changing fmor the 16% APR to the 12% APR she can save around $133.92 dollars after 4 years.