Question

Jalen has a balance of $1870 on a credit card with an APR of 19.7%, compounded daily. About how much will he save in interest over the course of a year if he transfers his balance to a credit card with an APR of 16.5%, compounded monthly. (Assume that Jalen makes no payments or new purchases during the year, and ignore any possible late payment fees.)

Answer 1

The formula is
A=p (1+r/k)^kt
A future value
P present value
R interest rate
K compounding periods
T time

When the compounding periods are daily balance after one year is
A=1,870×(1+0.197÷365)^(365×1)
A=2,277.06

When the compounding periods are monthly balance after one year is
A=1,870×(1+0.165÷12)^(12×1)
A=2,202.99

So will save
2,277.06−2,202.99
=74.07....answer

Hope it helps!