Question

Yang owed two credit cards with balances of $7,500 and $3,500. The card with the $3,500 balance charged 1.4% more than the other. At the end of one year, he paid is $797. What was the simple interest of each card?

Answer 1

The simple interest on the balance of $3,500 is 8.88%

The simple interest on the balance of $7,500 is 7.48%

What is simple interest?

The simple interest on a credit card is the annual interest multiplied by the credit card balance, in other words, the total interest paid on both credit cards in the year under review summed up to $797.

Let us assume that simple interest on the credit card with a balance of $7500 is X

interest=$7500*X

The interest on the other credit card would be X+1.4%

interest in dollars=$3500*(X+1.4%)

total interest cost in dollars on both cards can be determined as the sum of the interest costs

total interest=$7500*X+$3500*(X+1.4%)

total interest=7500X+3500X+49

total interest=797

797=7500X+3500X+49

797=10000X+49

797-49=10000X

748=10000X

X=748/10000

X=7.48%

The simple interest on the credit balance of $7500 is 7.48%

The simple interest on the credit balance of $3,500=7.48%+1.4%

The simple interest on the credit balance of $3,500=8.88%

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