Question

Suppose that on January 1 you have a balance of $6200 on a credit card whose APR is 14%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part(b) is interest? a. The monthly payment is $ (Do not round until the final answer. Then round to the nearest cent as needed.) b. The total paid since January 1 is $ (Use the answer from part (a) to find this answer. Round to the nearest cent as needed.) c. The percentage of the total paid that is interest is %. (Use the answer from part (b) to find this answer. Round to one decimal place as needed.)

Answer 1

a]	Monthly payments = 6200*(0.14/12)*(1+0.14/12)^12/((1+0.14/12)^12-1) =	$          556.68
b]	Total paid since January 1 = 556.68*12 =	$       6,680.16
c]	Total interest paid = 6680.16-6200 =	$          480.16
	Percentage of the total paid that is interest is = 480.16/6680.16 =	7.19%