Question

You owe $1,568.00 on a credit card with a limit of $2,200.00 at an interest rate of 11.3% APR. You pay $300.00/month until it is paid off. How much is the total interest you paid?

Answer 1

Answer:

47.80 is the answer

Step-by-step explanation:

Answer 2

Answer with explanation:

Amount Owed on the credit Card by me = $ 1568.00

Rate of Interest =11.3% APR

              $=\frac{113}{1200}$

Amount Paid Per Month =$ 300

After first Month Amount left which is to be Paid by me= $ 1568 - $ 300

                                                            = $ 1268

Total Amount that has to be paid when amount of $300 has been Paid

              $=1268 +\frac{1268 \times 11.3 \times 1}{1200}\\\\=1268 +11.95\\\\=1279.95$

⇒After Second Month Amount left which is to be Paid by me= $ 1279.95 - $ 300  = $ 979.95

Total Amount that has to be paid when amount of $600 has been Paid

              $=979.95 +\frac{979.95 \times 11.3 \times 1}{1200}\\\\=979.95 +9.23\\\\=989.18$

⇒After third Month Amount left which is to be Paid by me= $ 989.18 - $ 300  = $ 689.18

Total Amount that has to be paid when amount of $900 has been Paid

              $=689.18 +\frac{689.18 \times 11.3 \times 1}{1200}\\\\=689.18 +6.49\\\\=695.67$

⇒After Fourth Month Amount left which is to be Paid by me= $ 695.67 - $ 300  = $ 395.67

Total Amount that has to be paid when amount of $1200 has been Paid

              $=395.67 +\frac{395.67 \times 11.3 \times 1}{1200}\\\\=395.67 +3.73\\\\=399.40$

⇒After Fifth Month Amount left which is to be Paid by me= $ 399.40 - $ 300  = $ 99.40

Total Amount that has to be paid when amount of $1500 has been Paid

              $=99.40 +\frac{99.40 \times 11.3 \times 1}{1200}\\\\=99.40 +0.94\\\\=100.34$

So, in the end you pay a total of $ 100.34.

Total Money in the beginning = $ 1568.00

Total money paid including Interest = $300×5+$100.34

                             =$1600.34

So, total Interest Paid =$ 1600.34 -$ 1568.00

                              = $ 32.34