Concept explainers
Credit Card. After the holidays, Logan has a balance of $4867.59 on a credit card with an annual percentage rate (APR) of 21.3%. He decides not to make additional purchases with this card until he has paid off the balance.
a. Many credit cards require a minimum monthly payment of 2% of the balance. What is Logan’s minimum payment on a balance of $4867.59? Round the answer to the nearest dollar.
b. Find the amount of interest and the amount applied to reduce the principal in the minimum payment found in part (a).
c. If Logan had transferred his balance to a card with an APR of 13.6%, how much of his first payment would be interest and how much would be applied to reduce the principal?
d. Compare the amounts for 13.6% from part (c) with the amounts for 21.3% from part (b).
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Chapter 4 Solutions
Developmental Mathematics (9th Edition)
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