Question

3.You owe $1,032.56 on a credit card with an 11.25% APR. The minimum due is $150.00. What is the difference in the interest accrued if you pay the minimum amount due at the beginning of the month versus at the end of the month?
4.Using the credit card information from Problem 3, you decide to pay $300.00 instead of $150.00 at the beginning of the month. How much do you save in interest by doubling the amount?

Answer 1

Paybeginning $1,032 - $150 = $882.56* 1.00938 = $ 890.84
Pay end $1,032.56 * 1.00938 = $1042.25- $150 = $892.25

The difference is in interest in the first month 892.25−890.25=2


Note: 11.25 / 12 = 0.00938 interest per month

Answer 2

Answer:

Step-by-step explanation:

3.

Rate of interest is given as = 11.25

So, monthly rate = 11.25 / 12 = 0.00938

Amount owed = $1032.56

Minimum due = $150

First payment =  $1,032.56 - $150 = $882.56(new amount)

A=$p(1+r)^{t}$

$882.56(1+0.00938)^{1}$

= 882.56*1.00938 = $890.838

If paid at end = p = 1032.56

$1032.56(1+0.00938)$

1032.56*1.00938= $1042.245

Now subtracting the minimum payment = 1042.245-150 = $892.245

Difference between both amounts = 892.245-882.560 = $1.407≈$1.41

2.

You decide to pay $300.00 instead of $150.00 at the beginning of the month.

$1,032.56 - $300 = $732.56

$732.56(1+0.00938)^{1}$ = $739.431

$890.838 - $739.431 = $151.407