Jerry has a credit card debt of $15,600 that he would like to reduce by applying $8,500 of his inheritance money to the balance.
In addition, he would like to modify his debt payment plan to pay off the remaining balance in 24 months rather than 60 months. His credit card has an APR of 18%. How much will these changes save Jerry in finance charges (interest)?
HIs debt in his credit card is 15 600 dollars => 15 600 - 8500 dollars = 7100 dollars is his remaining debt. Now, he wants to pay it in 24 months only with annual interest of 18% => <span> 7100 dollars * .18 = 1278 dollars is the interest => 7100 + 1278 = 8 378 => 8378 / 12 = 698.17 dollars per month.</span>
