Suppose you have a $1,000 charge on a credit card charging 1% monthly interest using the adjusted balance method. The minimum payment due in May is $50. How much will you save in interest charges in June by paying $100 instead?

Steps please.

To calculate how much you will save in interest charges in June by paying $100 instead of the minimum payment of $50, follow these steps:

Step 1: Determine the adjusted balance in May.
To calculate the adjusted balance, subtract any payments made and any credits received since the last billing cycle from the previous month's balance. In this case, if you assume no additional credits or payments were made, the adjusted balance would be $1,000 - $50 = $950.

Step 2: Calculate the interest charge for May.
Multiply the adjusted balance by the monthly interest rate. In this case, the monthly interest rate is 1% or 0.01. So, the interest charge for May would be $950 * 0.01 = $9.50.

Step 3: Find the new balance after the payment in May.
Subtract the payment amount from the adjusted balance to get the new balance. In this case, the new balance would be $950 - $50 = $900.

Step 4: Calculate the interest charge for June.
Multiply the new balance by the monthly interest rate. In this case, the interest charge for June would be $900 * 0.01 = $9.

Step 5: Compare the interest charges for May and June.
By paying $100 instead of the minimum payment of $50, you saved $9.50 - $9 = $0.50 in interest charges for June.

Therefore, by paying $100 instead of the minimum payment, you will save $0.50 in interest charges in June.