Part 1: The total amount that Salvatore has paid in interest over the 7 months is $65.23.
Part II: The total amount that Salvatore has made in payments over the 7 months is $150.
Part III: The amount of Salvatore's payments that has gone to paying down the principal on his account is $84.77.
Part IV: Salvatore's new balance at the end of month 8 (if there are no new charges) is $1,328.50.
Part V: The amount Salvatore will be charged for interest for month 8 is $16.60.
How the amounts are computed:
Part 1: Total interest over the 7 months = $65.23 ($6.62 + $7.61 + $10.02 + $10.54 + $14.52 + $15.92)
Part II: The total amount that Salvatore has made in payments over the 7 months = $150 ($25 x 6)
Part III: The amount of Salvatore's payments that has gone to paying down the principal on his account is $84.77 ($150 - $65.23).
Part IV: Salvatore's new balance at the end of month 8:
Balance at the end of month 7 = $1,336.90 ($1,281.91 + $79.99 - $25)
Balance at the end of month 8 = $1,328.50 ($1,336.90 + $16.60 - $25)
Part V: Amount Salvatore will be charged for interest for month 8 = $16.60 ($1,336.90 x 14.9%/12)
Complete Question:
Salvatore's credit card has an APR of 14.9% calculated on the previous monthly balance. His credit card record for the last 7 months is shown in the table below. Salvatore is trying to figure out what this all means. Help him by answering the following questions.
Part 1: What is the total amount that Salvatore has paid in interest over the 7 months?
Part II: What is the total amount that Salvatore has made in payments over the 7 months?
Part III: How much of Salvatore's payments has gone to paying down the principal on his account?
Part IV: What is Salvatore's new balance at the end of month 8?
Part V: What will Salvatore be charged for interest for month 8?