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12 February, 17:31

Brooklyn opened a store credit card to purchase a sofa for $849. She put the entire purchase on the credit card. Her APR is 19.99% and the minimum payment is 5%. Assuming she makes only minimum payments, what is the remaining balance on her card after 3 months? a) $727.91b) $741.31c) $820.69d) $766.88

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  1. 12 February, 21:09
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    Answer: $766.88

    Explanation:

    Calculations:

    Total Credit card loan = $849

    APR - 19.99%

    Min payment = 5%

    1st Instalment payment

    = $849 (loan) * 5% (Min Pmt)

    = $42.45

    2nd Installment payment

    = ($849) * (5% * 19.99%) / 12

    =$849 * 0.0008329166

    = 0.7 - Int

    Principal payment = $849 - 42.45=806.55 * 0.05 (min payment) = 40.3275

    = 40.3275+0.7=41.03

    =$41.03

    3rd Installment payment

    = ($849) * (5% * 19.99%) / 6

    =$849 * 0.001641931

    = 1.394 - Int

    Principal payment = $849 - 42.45-41.03=765.52 * 0.05 (min payment) = 38.276

    = 38.28+1.394

    =$39.67
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