Question

Sonja's credit card has an APR of 21%, calculated on the previous monthly

balance, and a minimum payment of 2%, starting the month after the first
purchase. Her credit card record for the last 7 months is shown in the table
below.
End of Previous New Payment Finance Principal New
month balance
charges received charges paid balance
1
$0.00
$700.00 $0.00 $0.00 $0.00 $700.00
2 $700.00 $0.00 $14.00 $12.25 $1.75
$698.25
3 $698.25
$0.00 $13.97 $12.22 $1.75 $696.50
4 5696.50 $0.00 $13.93
$12.19 $1.74 $694.76
5 $694.76 $0.00 $13.90 $12.16 $1.74 $693.03
$693.03 $0.00 $13.86 $12.13 $1.73 $691.29
7 $691.29 $0.00 $13.83 $12.10 $1.73
5689.57
O
UN
About what percentage of Sonja's payments so far have gone to paying
interest?
O A. 10%
O B. 21%
O C. 23%
O D. 87%

Answer 1

Answer: D 87%

Explanation:

Ap-ex

Answer 2

Around 87% of Sonja's payments have gone towards paying interest on her credit card debt. The calculation is derived from the sum of finance charges divided by total payments made, then multiplied by 100.

The student asks about the percentage of Sonja's payments on her credit card debt that have gone to paying interest.

To calculate this, we should add up all the finance charges that Sonja has paid over the 7 months and divide it by the total amount she has paid, then multiply by 100 to get a percentage.

Sum of finance charges: $12.25 + $12.22 + $12.19 + $12.16 + $12.13 + $12.10 = $73.05

Total of payments made: $14.00 + $13.97 + $13.93 + $13.90 + $13.86 + $13.83 = $83.49

Percentage of payments that went to interest: (Finance charges / Total payments) × 100 = ($73.05 / $83.49) × 100 ≈ 87%

Thus, approximately 87% of Sonja's payments have gone to paying interest.