Question

Tula has a $5500 credit card balance that she revolves month to month. What is her minimum monthly payment if the credit card company calculates the payment based on 4% of the outstanding balance?

Answer 1

Answer:

The minimum monthly payment is $220

Explanation:

The minimum monthly payment is computed as 4% of outstanding balance,hence the minimum payments is computed thus:

4%*$5500=$220

Credit cards are issued financial institutions to their customers to enable make expenditure in advance.The funds being spent is not in the customer's account unlike debit cards where customer's account must have been pre-funded .

On settling the amount owed to the bank,the customer pays interest on the amount borrowed such as the 4% charged in this scenario.

The interest  rates charged are most times at single rate.