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

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