Question

Michelle has four credit cards with the balances and interest rates listed below. Rather than budget to pay each of the credit cards off in 36 months, Michelle would like to pay them off one at a time based on the balance for each credit card. In which order should Michelle pay off her credit cards?

Credit Card
Balance
APR
#1
$4,380
17%
#2
$1,365
19%
#3
$2,480
23%
#4
$5,000
15%
a.
1,2,3,4
b.
4,1,3,2
c.
4,3,1,2
d.
1,3,2,4

Answer 1

Order them by balance from largest to smallest: #4 ($5,000), #1 ($4,380), #3 ($2,480), #2 ($1,365). So answer: b.