Credit cards with debt and different interest rates

Assignment Help Financial Management

Reference no: EM131916426

An individual has three credit cards with debt and different interest rates. Card 1 has $500 of debt and 1.5% monthly interest rate, Card 2 has $750 of debt and 2.0% monthly interest rate, and Card 3 has $1000 of debt and 1.0% monthly interest rate.

If the individual sets aside $500 per month to pay off the debt, how should the $500 be distributed to three cards to minimize the amount of interest? (e.g Card 1 = $150/month, Card 2 = $100/month, Card 3= $250/month. The sum must add up to $500/month.)

Reference no: EM131916426

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