Eduardo has a balance of $3,265.96 on his credit card with an APR of 12.6%. His credit card requires a minimum monthly payment of 2% of the balance. If he transfers his balance to a credit card with an APR of 8.5% how of his first payment would be interest and how much would be applied to the principal?
Balance: 3265.96 APR 12.6%
Monthly periodic interest rate: 2%
Multiply the balance by the monthly interest rate to get monthly interest payment
$3265.96 X 0.02 = $65.32
Total interest paid in one year on top of ...
The APR stands for annual percentage return on a credit card. It is simply analogous to the simple interest on a loan. Being able to calculate the amount of interest can help us budget our loans and credit cards. These are the steps on how to do this.