Solve the problem. Assume that the minimum payment on a credit card is the greater of $27 or 3% of the unpaid balance:
-If the annual interest rate is 15.99%, find the difference between the minimum payment and the interest owed on an unpaid balance of $728.97 that is 1 month overdue.
A) $17.29
B) $14.29
C) $12.76
D) $12.22

Question

Quizplus · Accepted Answer

The minimum payment is the greater of $27 or 3% of the unpaid balance. 3% of $728.97 is $21.87, which is less than $27. So the minimum payment is $27. The interest owed on an unpaid balance of $728.97 that is 1 month overdue is $728.97 * 15.99% / 12 = $9.57. The difference between the minimum payment and the interest owed is $27 - $9.57 = $17.43.

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