Question

3) You owe $1,842.66 on a credit card at a 14.5% APR. You pay $250.00 at the beginning of the month and put another $250.00 in a savings account at a 4.0% APR. What is the difference in the amount of interest accrued between the credit card and savings account by the end of the month?
4) Using the information from problem 3, how much interest could you save by putting all $500.00 instead of just $250.00 toward the credit card at the beginning of the month?

Answer 1

3. Credit Card: (1842.66 - 250) (.145/12) = $19.24

Savings: 250(0.04/12) = $0.83  

Difference = 19.24 - 0.83 = $18.41  

4. Credit Card: (1842.66 - 500) (.145/12) = $16.22

You will save $18.41 - $16.22 = $2.19 by putting all $500 toward the higher credit card rate.  

Answer 2

Answer:

3.) 18.41

4.) 3.02

Step-by-step explanation: