Answer:
Calculate amount of annual interest:
The simple interest rate is the percentage of the credit that should be paid as interest on yearly basis. The amount of interest should be paid per year on a loan.
Miss. Margie has spent $700 for dental work and $1,400 for car transmission rebuilt. She has made both transactions on her credit card. If she does not pay credit balance of $2100, she will be charged 21 percent interest.
Calculate the annualized interest expenses.
Miss. Margie should pay annual interest if she does not pay off credit card balance. She has a credit balance of $2100. The interest rate on credit balance is 21 percent.
Annual Interest = Amount owned x Interest rate
Annual Interest = 2,100 x 0.21
Annual Interest = 441
Annual interest on credit card balance is $441
Money market investment is a high-liquid, and short term securities containing commercial paper. Treasury bill, banker's acceptance, promissory note.
Calculate the amount of interest received on money market investment. Miss. Margin has a money market account with $15.000. On this account she receives 3 percent interest.
So, the total interest earned on a money market account is:
Annual Interest = Amount x Interest rate
Annual Interest = 15,000 x 0.03
Annual Interest = $450
Miss. Margin has got $450 as annual interest on money market account of $15000 with the interest rate of 3 percent.
To calculate the amount of annual interest, she should write a check of 2,100 for pay off credit card balance, a money market account shows the balance of 12,900. The interest rate is 3 percent.
Annual interest = Amount x interest rate
Annual interest = 12,900 x 0.03
Annual interest = $387
If she should write the check out of her money market account she gets interest of $387.
So, she will lose the interest of $63
Miss. Margin should write the check'. She is able to cover credit card bill from money market account. It is always better to payoff credit card bill in full from income or saving than to pay credit card balance with interest on due balance.
If she pays credit card due balance from money market account, she will not have to pay interest charges
