Solve the problem.
-Eduardo has a balance of $\$ 3265.96$ on a credit card with an annual percentage rate (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 much of his first payment would be interest and how much would be applied to reduce the principal?
A) Interest: $\$ 34.29$; amount applied to principal: $\$ 31.03$
B) Interest: $\$ 23.13$; amount applied to principal: $\$ 47.51$
C) Interest: $\$ 34.29$; amount applied to principal: $\$ 36.14$
D) Interest: $\$ 23.13$; amount applied to principal: $\$ 42.19$

Question

Quizplus · Accepted Answer

The monthly interest rate is $8.5\% / 12 = 0.7083\%$. The interest for the first month is $0.007083 \times 3265.96 = \$ 23.13$. The minimum payment is $2\% \times 3265.96 = \$ 65.32$. The amount applied to the principal is $65.32 - 23.13 = \$ 42.19$.

Solve the Problem $3265.96\$ 3265.96$3265.96 On a Credit Card with an Annual Percentage Rate (APR)

Solve the Problem $\$ 3265.96$ On a Credit Card with an Annual Percentage Rate (APR)