132k views
1 vote
Your credit card bill has a balance of $625. The minimum payment due is $35 and your annual interest rate is 24%. If you only make the minimum payment, what amount will be on your next statement? Round your answer to the nearest hundredth and do NOT include a dollar sign ($) in your answer

User KingOtto
by
8.9k points

1 Answer

2 votes

Final answer:

If you only make the minimum payment on your credit card bill with a balance of $625 and an annual interest rate of 24%, the amount on your next statement will be $602.50.

Step-by-step explanation:

To calculate the amount that will be on your next credit card statement if you only make the minimum payment, you need to determine how much of your payment goes towards reducing the balance and how much goes towards interest. In this case, the minimum payment is $35, but we need to calculate the interest for the next month first.

With an annual interest rate of 24%, the monthly interest rate can be calculated by dividing the annual rate by 12. So, the monthly interest rate is 24% / 12 = 2%. Next, we multiply the current balance of $625 by the monthly interest rate to find the interest for the next month. $625 * 2% = $12.50.

Finally, subtract the interest from the minimum payment to find the amount that will be applied to the balance. $35 - $12.50 = $22.50. So, if you only make the minimum payment, the next statement will have a balance of $625 - $22.50 = $602.50.

User Bart Czernicki
by
7.8k points