Question

Suppose that on January 1 you have a balance of ​$3700 on a credit card whose APR is 15​%, which you want to pay off in 1 year.

Monthly payment?

Total paid?

The percentage of the total paid that is interest is?

Answer 1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

BC $3,700.00 15% Credit card balance APR Monthly interest rate No. of monthly payments 1.25% 12 Amount of Monthly payment $333.96 Total amount paid $4,007.47 9 b. 10 11 c. 12 13 Total interest paid $307.47 Percentage of total paid is interest 7.67% 14

Cell reference -

3700 0.15 Credit card balance APR Monthly interest rate No. of monthly payments 4 =C3/12 12 =PMT(C4,C5,-C2,,0) 7 a. Amount of Monthly payment 8 9 b. Total amount paid 10 11 c. Total interest paid =C7*C5 =C9-C2 12 13 Percentage of total paid is interest =C11/09

Hope it will help, please do comment if you need any further explanation. Your feedback would be highly appreciated.