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Math Help - Interest rates and credit cards

  1. #1
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    Interest rates and credit cards

    The question is:

    You owe $4543.26 on a credit card. The interest rate is 19.99% and you are paying $125 per month.

    How much of your next payment will go toward interest?

    How much of your next payment will go toward principal?

    How much will you owe after you make your next payment?


    I will appreciate any help! Thanks!
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  2. #2
    MHF Contributor kalagota's Avatar
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    it is easier to see if you make your table of schedule..
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  3. #3
    GAMMA Mathematics
    colby2152's Avatar
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    Quote Originally Posted by linda14522 View Post
    The question is:

    You owe $4543.26 on a credit card. The interest rate is 19.99% and you are paying $125 per month.

    How much of your next payment will go toward interest?

    How much of your next payment will go toward principal?

    How much will you owe after you make your next payment?


    I will appreciate any help! Thanks!
    That is the annual interest rate... so let's break it down into one month's interest rate.

    (1.1999)^{\frac{1}{12}} = 1.015309

    i^{(12)} = 1.5309%

    Interest on balance equals: .015309(4543.26) = 69.55
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