1 / 5

Credit Card Amortization Analysis for Cow Purchase: Interest and Payment Breakdown

This analysis explores the implications of using a credit card with a 17.99% APR to finance a $3,000 cow purchase. By making minimum payments of either $25 or 2% of the balance, we set up an amortization table for the first five months. After two months, the total interest paid amounts to $89.72. A projection over 12 years reveals a remaining loan balance of $1,455.87 after 144 months. Overall, the total interest paid over 12 months reaches $525.08, culminating in an astonishing $4,622.13 interest payment after the entire loan term.

helena
Download Presentation

Credit Card Amortization Analysis for Cow Purchase: Interest and Payment Breakdown

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 3/9

  2. Let’s say you use a credit card that has a 17.99% Annual Percentage Rate to buy a cow that costs $3,000.00. Assume you make the minimum payment of either $25 or 2% of your balance. Set up the first five months of the amortization table. How much interest did you pay after two months?

  3. Total interest after 2 months is $89.72

  4. After 12 years of making payments what is the balance left on the loan? After 144 months the balance left is $1,455.87. How much interest have you paid after 12 months? $525.08 Incidentally, after 144 months you’ve paid $4,622.13 in interest.

More Related