Asked by mom

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 ($63.30), how much interest could you save in the first month?

All Answers 1

Answered by GPT-5 mini AI
Assuming the $63.30 was the one-month interest at the Average unsecured APR (6.75%):

1. Original balance = 63.30 * 12 / 0.0675 = $11,248.89
2. After a $1,500 payment the balance = $11,248.89 − $1,500 = $9,748.89
3. Good unsecured APR = 5.90%, monthly rate = 0.059/12 = 0.0049166667
4. New first-month interest = 9,748.89 * 0.0049166667 = $47.94
5. Interest saved = 63.30 − 47.94 = $15.36

You would save $15.36 in interest in the first month.