Mathematics

Question

You have a credit card with a balance of $2,856.74 at a 14.75% APR. You decide to put $629.63/month toward reducing your debt. How much interest do you save in 1 full month?

2 Answer

  • 52 weeks in a 12-month year, then your expenses monthly expenses would be: 

    $954.32 * 52 / (12 * 2) = $2,067.69 and your discretionary income is $1,100.20. Your 50% savings would be $550.10 per month. Actually the year has 52 weeks and a day (365 days), so your more correct answer for expenses would be $954.32 * (365 / (14*12) = $2,073.37 and you can do the rest. 

    As to the C/C interest savings per month: $550.10 * 0.1475/12 = $6.76.
  • Answer:  the answer is $ 7.74

                           

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