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Question 1139385: Could someone please help me with this math problem? I have been trying to get the right answer myself and it comes up wrong. Thank you.
You have a credit card with an APR of 36%. The minimum payment is 10% of the balance. Suppose you have a balance of $750. You decide to stop charging and make only the minimum payment. Calculate the minimum payment for the first and second payments.
Answer by greenestamps(13195)   (Show Source):
You can put this solution on YOUR website!
The APR is 36%; the monthly interest rate is 36%/12 = 3%.
Current balance: $750
Finance charge: 3% of $750 = $22.50
New balance (before first payment): $750+$22.50 = $772.50
First payment: 10% of $772.50 = $77.25
New balance (after first payment): $772.50-$77.25 = $695.25
Finance charge: 3% of $695.25 = $20.86
New balance (before second payment): $695.25+$20.86 = $716.11
Second payment: 10% of $716.11 = $71.61 (or maybe $71.62, depending on your bank's policies)
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