Concept explainers
Credit Cards. At the end of her junior year of college, Kasha has a balance of $6428.74 on a credit card with an annual percentage rate (APR) of 18.7%. She decides not to make additional purchases with this card until she has paid off the balance.
a. Many credit cards require a minimum payment of 2% of the balance. At this rate, what is Kasha’s minimum payment on a balance of $6428.74? Round the answer to the nearest dollar.
b. Find the amount of interest and the amount applied to reduce the principal in the minimum payment found in part (a).
c. If Kasha had transferred her balance to a card with an APR of 13.2%, how much of her payment would be interest and how much would be applied to reduce the principal?
d. Compare the amounts for 13.2% from part (c) with the amounts for 18.7% from part (b).
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Developmental Mathematics (9th Edition)
- College AlgebraAlgebraISBN:9781305115545Author:James Stewart, Lothar Redlin, Saleem WatsonPublisher:Cengage Learning