you owe 848.42 on a credit card at a 12.75% apr the mininum is 50.00 how much goes toward principal if you make the minimun payment at the end of the first month?
To calculate how much of the minimum payment goes towards the principal, we first need to determine the interest portion of the payment.
Interest for the first month = Current balance * monthly interest rate
Monthly interest rate = APR / 12 = 12.75% / 12 = 1.0625% or 0.010625
Interest for the first month = 848.42 * 0.010625 = 9.003
Now, we subtract the interest from the minimum payment to find out how much goes towards the principal.
Principal portion of the payment = Minimum payment - Interest
Principal portion of the payment = 50 - 9.003 = 40.997
Therefore, if you make the minimum payment of $50 at the end of the first month, $40.997 will go towards the principal.