Problem
Melissa has reached her credit card limit of $ 6,500. Since Melissa has poor credit history, the annual interest rate on her credit card is 19%. Using an online calculator, Melissa determined that if she pays $ 220 per month and does not make any additional purchases with her credit card, it will take her 41 months to pay off the credit card. Which of the follow represents the total interest Melissa will pay when her credit card is paid off?
Solution
For this case we can start the amount of money paid by Mellissa with this operation:
220$/month *41 months = $9020
And since the credit card limit is $6500 we can calculate the interest paid with this difference:
$9020- $ 6500=$2520
And the best answer for this case would be $2520