Answer: kindly check Explanation
Step-by-step explanation:
The balance on card = $2000
Interest rate = 12.5%
Therefore, monthly rate = 12.5% / 12 = 0.0104167
Paying $75 of monthly balance :
Interest amount on 2000 = 0.0104167 × 2000 = $20.83
Therefore,
Principal amount payed = 75 - 20.83 = 54.17
Balance = ($2000 + $20.83) - $75 = 1945.83
Interest on balance = 0.0104167 × 1945.83 = $20.2691
Paying $100 of monthly balance :
Interest amount on 2000 = 0.0104167 × 2000 = $20.83
Therefore,
Repayment = 100 - 20. 83 = $79.17
Balance = ($2000 + $20.83) - $100 = 1920.83
Interest on balance = 0.0104167 × 1920.83 = $20.0087
Interest saved by paying $100 instead of $75
$20.27 - $20.00 = $0.27 = 27 cent
