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ou owe your credit company $25,000 and plan to make no payments on your credit card for 1.0 year. Due to your current credit score, your credit card company charges you an APR of 30.0%. If, however, you took immediate measures to improve your credit score by 100points, your credit card company agrees to improve your APR by 5.0%. Assuming you are then unable to make any payments for 12 months, how much money would you save by taking immediate actions to improve your credit score

Respuesta :

Parrain

Answer: $‭1,603.93‬

Explanation:

APR is monthly so figures have to be adjusted to monthly figures for a year.

If you fail to improve your credit score, the interest you will pay is:

= 25,000 * [(1 + 30%/12)¹² - 1]

= $8,622.22

If you improve your credit score, your APR will decrease to 25.0% from 30%.

Interest paid would be:

= 25,000 *  [(1 + 25%/12)¹² - 1]

= $7,018.29

Savings = 8,622.22 - 7,018.29

= $‭1,603.93‬

Answer:

1,603.93‬

Explanation:

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