Question

Leyla transferred a balance of $2500 to a new credit card at the beginning of the year. The card offered an introductory APR of 3.9% for the first 3 months and a standard APR of 28.8% for the rest of the year. Leyla made no payments or new purchases during the year, and she wasn't charged any late payment fees. The credit card compounds interest monthly. Help Leyla figure out how much money the introductory APR saved her over the course of the year. (5 points: Part I – 1 point; Part II – 1 point; Part III – 1 point; Part IV – 1 point; Part V – 1 point) Part I: What was Leyla's balance at the end of the introductory period? Part II: For how many months during the year did Leyla have the standard APR? Part III: What was Leyla's balance at the end of the year? Part IV: What would Leyla's balance have been at the end of the year had there not been an introductory APR? Part V: How much money did the introductory APR save Leyla over the course of the year?

Answer 1

Given:
Initial balance: 2,500
introductory APR: 3.9% for the first 3 months
standard APR: 28.8% for the last 9 months.

3.9% / 100% = 0.039
0.039 / 360 * 30 = 0.00325 monthly rate for the 1st 3 months.

28.8% / 100% = 0.288
0.288 / 360 * 30 = 0.024 monthly rate for the next 9 months.

The total balance at the end of the year is 3,125.12

If Standard APR was used all through out, the total balance at the end of the year would be: 3,323.07

Introductory APR helped save:
3,323.07 - 3,125.12 = 197.95

Pls see attachment for the table I made: 
Interest = Previous balance * interest rate
Ending balance = previous balance + interest