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Question - Choose one of the scenarios and answer all four questions. In all of the credit card scenarios, assume a month with 30 days and 14% APR. For each scenario, do the calculations using the average daily balance method.
In all four cases, assume the initial balance is $300.
1. If you make a $300 payment on the first of the month, how much interest will you owe at the end of the month?
2. If you make a $300 payment on the 30th of the month, how much interest will you owe at the end of the month?
3. If you make a $10 payment every day for 30 days. How much interest will you owe at the end of the month?
4. Based on your results, suggest a payment strategy that will minimize your monthly interest owed.
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