Round any decimals to the nearest penny.
You have a credit card with a balance of $2,856.74 at a 14.75% APR. Instead of saving the amount in question #11 in a savings account, you put the amount toward reducing your debt. How much interest do you save in 1 full month?
To calculate the interest saved in 1 full month:
1. Calculate the daily interest rate:
APR = 14.75%
Daily interest rate = APR / 365 = 0.1475 / 365 = 0.00040411
2. Calculate the interest charged in 1 month before paying off the balance:
Interest charged = Balance * Daily interest rate * Number of days in a month
Number of days in a month = 30 (assuming a 30-day month)
Interest charged = $2,856.74 * 0.00040411 * 30 = $3.46
Therefore, by paying off $2,856.74 towards reducing your debt, you would save $3.46 in interest charged in 1 full month.