Question

You have two credit cards. One had a balance of 3745 at a 6.25% APR and the other has a balance of 1045.00 and is dependent upon your credit score. Your score is 500. How much total interest is axcrued in the first month? (Rate for score of 500 is 10.25%)

Answer 1

3745(.0625/12)+1045(.1025/12)

19.5052+8.9260

$28.43 (to nearest cent)

Answer 2

$28.431

Explanation:

Principal amount for first credit card = $3745

Rate = 6.25%

Time = 1 month = 1/12

Interest of first credit card =
`(P*R*T)/(100)`

= 0.0625(3745)/12

= $19.5052

Principal amount for second credit card = $1045

Rate = 10.25%

Time = 1 month = 1/12

Interest of first credit card =
`(P*R*T)/(100)`

= 0.1025(1045)/12

= $8.9260

Total interest accrued in first month = $19.5052+$8.9260

= $28.431