Respuesta :
Answer:
Cynthia will have to pay $152.16 extra in finance charges.
Step-by-step explanation:
Cynthia had a credit card with a 17% APR and a $3,265 balance.
Cynthia’s credit card company has increased her interest rate to 21%.
Here we have two scenarios, 1st when p = 3265 r = 17% and n = 24
Second when p = p = 3265 r = 21% and n = 24
Scenario 1:
[tex]r =17/12/100=0.014166[/tex]
EMI formula is :
[tex]\frac{p\times r\times(1+r)^{n}}{(1+r)^{n}-1}[/tex]
Putting the values in formula we get;
[tex]\frac{3265\times0.014166\times(1+0.014166)^{24}}{(1+0.014166)^{24}-1}[/tex]
= [tex]\frac{3265\times0.014166\times(1.014166)^{24}}{(1.014166)^{24}-1}[/tex]
EMI = $161.43
Scenario 2:
r = [tex]21/12/100=0.0175[/tex]
Putting the values in formula we get;
[tex]\frac{3265\times0.0175\times(1+0.0175)^{24}}{(1+0.0175)^{24}-1}[/tex]
= [tex]\frac{3265\times0.0175\times(1.0175)^{24}}{(1.0175)^{24}-1}[/tex]
EMI = $167.77
Now, difference in EMI's = [tex]167.77-161.43=6.34[/tex] dollars
And for 24 months this amount becomes = [tex]24\times6.34=152.16[/tex] dollars
Therefore, Cynthia will have to pay $152.16 extra in finance charges.
