Question

Round any decimals to the nearest penny.

Secured Unsecured
Credit APR APR
Excellent 4.75% 5.50%
Good 5.00% 5.90%
Average 5.85% 6.75%
Fair 6.40% 7.25%
Poor 7.50% 8.40%

Use the table above for interest rate questions.
If you improved your credit score to good and paid $1,500 on your purchase from question 11, how much interest could you save in the first month?

Answer 1

I don't have the details of question 11 (especially what your original credit rating was, and whether the purchase is secured or unsecured). Tell me the original rating and whether the purchase is secured/unsecured and I will compute the exact saving.

Meanwhile, here's how to compute it and some common examples for a $1,500 payment. Formula:
interest saved in the first month = principal × (APR_old − APR_new) / 12

Assuming the purchase is unsecured (use the Unsecured APR column) and you improve to Good (5.90%):
- From Average (6.75% → 5.90%): difference = 0.85% → saved = 1500 × 0.0085 / 12 = $1.06
- From Fair (7.25% → 5.90%): difference = 1.35% → saved = 1500 × 0.0135 / 12 = $1.69
- From Poor (8.40% → 5.90%): difference = 2.50% → saved = 1500 × 0.0250 / 12 = $3.13

If the purchase is secured (use the Secured APR column) and you improve to Good (5.00%):
- From Average (5.85% → 5.00%): saved = $1.06
- From Fair (6.40% → 5.00%): saved = $1.75
- From Poor (7.50% → 5.00%): saved = $3.13

Tell me the original rating and secured/unsecured and I'll give the single exact number.