you owe 1,964.32 on a credit card with a 15.25% apr the minimum due is $175.00 you pay the minimum and you put $250.00 in a savings account earning a 3.75% apr
1. if you pay the minimum amount at the beginning of the month and make your savings deposit at the same time what is the interest accrued for each account at the end of 1 month
2. if you paid all the available money toward the debt how much interest would accrued by the end of the month?
3 if you paid all the available money toward the debt until the debt was paid off how many months would it take?
1.
- For the credit card:
Interest accrued = $1,964.32 * 0.1525/12 = $25.01
- For the savings account:
Interest accrued = $250 * 0.0375/12 = $0.78
2. If you paid all available money towards the debt, you would pay $425 ($175 minimum payment + $250 savings deposit).
- Interest accrued on the credit card:
$1,964.32 * 0.1525/12 = $25.01
3. If you paid all available money towards the debt until it was paid off, it would take approximately 6 months.
- Each month you pay $425 towards the debt, reducing the balance by $250.32 ($425 - $174.68 interest)
- Divide the total debt of $1,964.32 by $250.32 to get the number of months needed.