Kenny realizes that he totally forgot about a credit card that he made some charges to a few months back. He checks the balance and sees that it has gone all the way up to about $1790 (charges, interest, late fees). Because of his late payments, the APR on the card is now at 19.98%. Further, the minimum payment on the card is now $30 every month.   Considering that the current balance of the card is $1790 and the APR is 19.98%   Calculate the monthly percentage rate and determine how much of the first $30 minimum payment would go towards interest and how much would go towards reducing the balance on the card.

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter5: Managing Checking And Savings Accounts
Section: Chapter Questions
Problem 7FPC
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Kenny realizes that he totally forgot about a credit card that he made some charges to a few months back. He checks the balance and sees that it has gone all the way up to about $1790 (charges, interest, late fees). Because of his late payments, the APR on the card is now at 19.98%. Further, the minimum payment on the card is now $30 every month.

 

Considering that the current balance of the card is $1790 and the APR is 19.98%

 

Calculate the monthly percentage rate and determine how much of the first $30 minimum payment would go towards interest and how much would go towards reducing the balance on the card.

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