Round to the nearest penny.
You owe $2,348.62 on a credit card with an 8.75% APR. You pay $300.00 toward the card at the beginning of the month. What is the difference in interest accrued compared with if you had paid an additional $300.00 more than you had originally intended toward the card?
First, calculate the interest accrued with the original payment of $300.00:
Interest accrued = $2,348.62 * 0.0875/12 = $16.98
Now, calculate the interest accrued with an additional $300 payment:
New balance after first payment = $2,348.62 - $300.00 = $2,048.62
Interest accrued with additional $300 payment = $2,048.62 * 0.0875/12 = $14.93
Difference in interest accrued = $16.98 - $14.93 = $2.05
Therefore, the difference in interest accrued is $2.05.