Paying minimums for 5 months costs everyone $520 in interest, with Alexander paying off the debt first and Cecilia ending with the lowest remaining balance.
Sharon:
The monthly interest: Sharon's balance is $5,000, and the APR is 25%. So, the monthly interest rate is (25% / 12) = 2.083%.
Calculate the interest paid each month: Multiply the monthly interest rate by the remaining balance: 2.083% * $5,000 = $104.15.
The new balance after each month: Subtract the minimum payment from the previous balance and add the monthly interest: $5,000 - $150 + $104.15 = $4,954.15.
Cecilia:
The same steps as for Sharon to calculate the monthly interest.
The new balance after each month: Subtract Cecilia's payment from the previous balance and add the monthly interest: $5,000 - $400 + $104.15 = $4,504.15.
Alexander:
The same steps as for Sharon to calculate the monthly interest.
The new balance after each month: Subtract Alexander's payment from the previous balance and add the monthly interest: $5,000 - $800 + $104.15 = $4,104.15.
After 5 months:
Sharon: Her total interest paid will be 5 months * $104.15 = $520.75. Her remaining balance will be $4,954.15 - $750 (total minimum payments) = $4,204.15.
Cecilia: Her total interest paid will be 5 months * $104.15 = $520.75. Her remaining balance will be $4,504.15 - $2,000 (total payments) = $2,504.15.
Alexander: His total interest paid will be 5 months * $104.15 = $520.75. His remaining balance will be $4,104.15 - $4,000 (total payments) = $104.15.