Question

Richard has a balance of $2200 on a credit card with an APR of 31.3% compounded monthly about how much will he save in interest over the course of a year if he transfers his balance to a credit card with an APR 19.1% compounded monthly

Answer 1

the answer is 337.49

Answer 2

He will save $283.8284

Explanation:

We have given that Richard has a balance of $2200 on a credit card with an APR of 31.3 %

So principle amount P = $2200

And he transfers his balance to credit car with an APR of 19.1 %

So net rate of interest = 31.3 - 19.1 = 12.2 %

It is compounded monthly so time period n = 12

And rate of interest
`=(12.2)/(12)=1.0167%`

We know that total amount is given by

`A=P(1+(r)/(100))^n=2200(1+(1.067)/(100))^(12)=$2283.8284`

So interest will be $2283.8284 - $2200 = $283.8284