Question

Ellen has maxed out her credit card at

$13,500

and vows not to make any other

credit card purchases. Her credit card company charges

1.21

% interest per

month, and the minimum monthly payment is all interest due plus

4

% of the

principal balance. How much of the balance can Ellen pay down if she pays the

minimum payment only for 4 month

Answer 1

Ellen pay down if she pays the minimum payment only for 4 month: $2,649
($615 + $2,034)
Working
	Principal	Interest	Payment of principal	Outstanding Bal.
	$13,500	$163	$540	$12,960
	$12,960	$157	$518	$12,442
	$12,442	$151	$498	$11,944
	$11,944	$145	$478	$11,466
		$615	$2,034
Interest: ($13,500 x 1.21%)
Payment of principal: ($13,500 x 4%)