Several years ago, newspapers reported that the average unpaid balance on VISA cards was about $ 1200 . Let's say that you are an average consumer, that your VISA card charges you at the rate of 18% per year, and that each year, you have an unpaid balance of exactly $ 1200 . How much money would you save if you switched to a credit card that charged only an 8 % annual interest rate?

Question

Several years ago, newspapers reported that the average unpaid balance on VISA cards was about $ 1200 . Let's say that you are an average consumer, that your VISA card charges you at the rate of 18% per year, and that each year, you have an unpaid balance of exactly $ 1200 . How much money would you save if you switched to a credit card that charged only an 8 % annual interest rate? ​

Quizplus · Accepted Answer

The difference in interest rates is 10% (18% - 8%). On a $1200 balance, 10% of $1200 is $120.

Several Years Ago, Newspapers Reported That the Average Unpaid Balance