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3 years ago

Why is it more difficult to get out of debt when only paying the minimum payment?

Business

1 answer:

Artyom0805 [142]3 years ago

7 0

When one keeps paying only the minimum amount, they will find getting out of debt harder because:

More interest will accrue on the balance left

When a person pays the minimum balance that they are supposed to pay on a loan, they will be leaving a larger portion of money to be paid back.

This amount will accumulate interest such that the debt will keep increasing because the interest needs to be paid back as well.

In order to get out of debt faster, it is recommended that you pay higher than the minimum because this would reduce the amount that interest is charged on which means that you would owe less interest.

In conclusion, paying the minimum balance leads to more interest accumulating which makes getting out of debt difficult.

Find out more at brainly.com/question/13711677.

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Read 2 more answers

During March 2019, Alaska Corporation recorded $266,000 of costs related to factory overhead. Alaska's overhead application rate

ehidna [41]

Answer:

Underapplied overhead= $16,000

Explanation:

Because the estimated and real direct labor hours are the same, the estimated overhead equals the allocated overhead.

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To calculate the over/under allocation, we need to use the following formula:

Under/over applied overhead= real overhead - allocated overhead

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