Question

You owe $976.34 on a credit card that has an interest rate of 10.75% APR you pay $100.00 at the end of each month Calculate the difference between the interst accrued by a $976.34 balance on the credit card and whats $100.00 would earn in savings account that has an interest rate of 2.75% APR over the span of one month

Answer 1

How much is paid toward the credit card principal at the end of the first month

Answer 2

First, we need to calculate the monthly interest rate for the credit card:

10.75% APR / 12 months = 0.8958% monthly interest rate

Next, we need to calculate the interest accrued on the credit card balance over the span of one month:

$976.34 x 0.8958% = $8.75 in interest accrued

Now, we need to calculate the interest earned on $100.00 in a savings account with a 2.75% APR over the span of one month:

$100.00 x 2.75% / 12 months = $0.23 in interest earned

Finally, we can calculate the difference between the two:

$8.75 - $0.23 = $8.52

Therefore, over the span of one month, the difference between the interest accrued on the credit card balance and the interest earned on $100.00 in a savings account is $8.52.

Answer 3

The amount paid towards the credit card principal at the end of the first month can be calculated by subtracting the interest accrued from the payment made:

$100.00 - $8.75 = $91.25

Therefore, $91.25 is paid towards the credit card principal at the end of the first month.