Question

Miguel has a credit card bill of $7250 with an interest rate of 16%. To pay his bill off in one year, he must make monthly payments of $657.80. To pay his bill off in 18 months, he must make monthly payments of $455.71. How much extra will he pay if he wants to make the lower monthly payments

Answer 1

Answer:

The extra amount to be paid = $ 309.15

Step-by-step explanation:

Credit card bill = $ 7250 .

Interest rate = 16 % .

AMOUNT TO BE PAID IN 1 YEAR

Monthly payment = $ 657.80

Total amount to be paid in a year = $ 657.80 × 12 = $ 7893.6

Interest amount in 1 year = $ 7893.6 - $ 7250 =  $ 643.6.

AMOUNT TO BE PAID IN 18 MONTHS

Monthly payment = $ 455.71.

Total amount to be paid in a 18 months = $ 455.71 × 18 =  $ 8202.78

Interest amount  to be paid in 18 months = $ 952.78 .

The extra amount to be paid = $ 8202.78 - $ 7893.6 =  $ 309.15