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Carl has a credit card with a balance of $5,260 and an APR of 21%. With the monthly payments he has been making, Carl would be able to pay off his credit card in 18 months. After receiving a promotional offer in the mail, Carl decides to transfer his balance to a new credit card with a 15% "introductory" APR for the first 12 months. After 12 months, the APR increases to 23%. How much will Carl save in finance charges (interest) if he pays off the credit card before the introductory APR expires? a. $285.38 b. $480.30 c. $789.00 d. $917.42

Respuesta :

The Carl save in finance charges (interest) if he pays off the credit card before the introductory APR expires is $480.30

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azikennamdi

This question is related to Debt Management. If Carl pays off the credit card before the introductory APR expires, he will save  $315.60

What is an Introductory APR?

APR means Annual Percentage Rate. Usually, the APR for most institutions are usually low but gradually increases after a period of time.

In this case, the Introductory APR is 15%. Since carl transferred the balance to his new credit card with this introductory APR (iAPR) and paid off before the iAPR expired, the amount saved will be given as:

Old charges less New charges using iAPR.

Old charges based on the existing APR (21%) is:

21% x 5260 =$1,104.60

New charges based on new iAPR is:

15% x 5260 = $789.00

Savings for using the new iAPR therefore is:

1,104.60 - 789.00 = $315.60

Hence the amount saved by using the new card with the iAPR is $315.60

Learn more about APR at:

https://brainly.com/question/2772156

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