Question

you owe 848.42 on a credit card at a 12.75% apr the mininum is 50.00 how much goes toward principal if you make the minimun payment at the end of the first month?

Answer 1

[AI-generated answer — Bot GPT 3.5]

To calculate how much of the minimum payment goes towards the principal, we first need to determine the interest portion of the payment.

Interest for the first month = Current balance * monthly interest rate
Monthly interest rate = APR / 12 = 12.75% / 12 = 1.0625% or 0.010625
Interest for the first month = 848.42 * 0.010625 = 9.003

Now, we subtract the interest from the minimum payment to find out how much goes towards the principal.

Principal portion of the payment = Minimum payment - Interest
Principal portion of the payment = 50 - 9.003 = 40.997

Therefore, if you make the minimum payment of $50 at the end of the first month, $40.997 will go towards the principal.