Question

Round any decimals to the nearest penny.

Secured Unsecured
Credit APR APR
Good 5.00%

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, (car for $12,465.00 plus 5.65% sales tax) how much interest could you save in the first month?

Answer 1

I don’t have the APR you were paying before improving your score. I can compute the new interest and give a formula (and a few examples) so you can get the saved amount once you tell me the old APR.

Step 1 — total purchase:
- Car: $12,465.00
- Sales tax 5.65%: 12,465.00 × 0.0565 = 704.27
- Total purchase = 12,465.00 + 704.27 = $13,169.27

Step 2 — financed after $1,500 down:
- Financed principal = 13,169.27 − 1,500.00 = $11,669.27

Step 3 — interest in the first month at Good APR = 5.00%:
- Monthly rate = 0.05 / 12 = 0.0041666667
- First‑month interest = 11,669.27 × 0.0041666667 = $48.71

Step 4 — how much you save in month 1:
- If old APR = r (as a decimal), first‑month interest then = 11,669.27 × (r / 12).
- Interest saved in month 1 = 11,669.27 × (r/12 − 0.05/12) = 11,669.27 × (r − 0.05) / 12

Examples:
- If old APR was 6.00% → old month = $58.35 → saved = $9.64
- If old APR was 7.00% → old month = $68.07 → saved = $19.36
- If old APR was 8.00% → old month = $77.80 → saved = $29.09
- If old APR was 10.00% → old month = $97.24 → saved = $48.53

Tell me the APR you had before improving your score (or paste the full APR table from Question 11) and I’ll give the exact savings.