Question

you owe 848.42 on a credit card at a 12.75% apr the mininum payment of 50 how much goes towards the principial if you make the mininum payment at the end of the first month

if you paid the 50 at the beginning of the month to decrease the principil how much intrest accures by the end of the first month?
how much do you save in intrest by paying at the beginning of the month

Answer 1

[AI-generated answer — Bot GPT 3.5]

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

To calculate the interest accrued by the end of the first month, we first need to find the daily interest rate. The daily interest rate is calculated by dividing the annual percentage rate (APR) by 365 days.

Daily interest rate = 12.75% / 365 = 0.0003493

Next, we calculate the interest accrued by multiplying the average daily balance by the daily interest rate, and then multiplying that by the number of days in the billing cycle (let's assume a 30-day billing cycle):

Interest accrued = $848.42 * 0.0003493 * 30 = $8.38

Therefore, with a minimum payment made at the end of the first month, you would save $8.38 in interest by paying at the beginning of the month and reducing the principal before the interest is calculated.