@Mertsj @CarlosGP

Shawn has a balance of $1200 on a credit card with an APR of 18.7%, compounded monthly. About how much will he save in interest over the course of a year if he transfers his balance to a credit card with an APR of 12.5%, compounded monthly? (Assume that Shawn will make no payments or new purchases during the year, and ignore any possible late payment fees.)

A. $181.46
B. $117.85
C. $85.77
D. $87.33

Question

@Mertsj @CarlosGP 

Shawn has a balance of $1200 on a credit card with an APR of 18.7%, compounded monthly. About how much will he save in interest over the course of a year if he transfers his balance to a credit card with an APR of 12.5%, compounded monthly? (Assume that Shawn will make no payments or new purchases during the year, and ignore any possible late payment fees.)

 		A.	$181.46
 		B.	$117.85
 		C.	$85.77
 		D.	$87.33

anonymous · Answer

Calculate the savings like:
$$S=1200(1+18.7/1200)^{12}-1200(1+12,5/1200)^{12}=1444.67-1358.90=85.77$$

anonymous · Answer

Soultion: 85.77$