Round to the nearest penny.
You owe $1,032.56 on a credit card with an 11.25% APR. The minimum due is $150.00. What is the difference in the interest accrued if you pay the minimum amount due at the beginning of the month versus at the end of the month?
To calculate the interest accrued by paying the minimum amount due at the beginning of the month, we first need to determine the daily periodic rate.
Daily periodic rate = APR / 365
Daily periodic rate = 0.1125 / 365
Daily periodic rate = 0.0003082
Next, we calculate the interest accrued by paying the minimum amount due at the beginning of the month:
Interest accrued = $1,032.56 * 0.0003082 * 30 = $9.52
Therefore, by paying the minimum amount due at the beginning of the month, you would accrue $9.52 in interest.
Now, let's calculate the interest accrued by paying the minimum amount due at the end of the month.
Interest accrued = $1,032.56 * 0.0003082 * 31 = $9.57
Therefore, by paying the minimum amount due at the end of the month, you would accrue $9.57 in interest.
The difference in interest accrued between paying at the beginning and end of the month is $9.57 - $9.52 = $0.05.
So, the difference in interest accrued is $0.05.