What is the formula to calculate a credit card balance of 513.24 with a 17 daily interestrate making 10.00 payments each month?

Answer 1

The 17% interest is actually an annual rate, so each month you are charged 17%/12=1.42%.

There is no simple formula to calculate your monthly balance as far as I know, the best way is to just calculate each month.

Month 1:

Carry-over Balance: 513.24$

Interest: 1.42% x 513.24 = 7.27$

Payment: 10.00$

Final Balance: 513.24$ + 7.27$ - 10.00$ = 510.51$

Month 2:

Carry-over balance: 510.51$

Interest: 1.42% x 510.51 = 7.23$

Payment: 10.00$

Total: 510.15$ + 7.23$ - 10.00$ = 507.74$

Month 3:

Carry-over balance: 507.74$

Interest: 1.42% x 507.74 = 7.19$

Payment: 10.00$

Total: 507.74$ + 7.19$ - 10.00$ = 504.94$

... (I calculated how far it would go using Excel)

Month 93:

Carry-over balance: 3.12$

Interest: 1.42% x 3.12 = 0.04$

Payment: 3.16$

Total: 3.12$ + 0.04$ - 3.16$ = 0.00$

So, with 17% annual interest rate and a 10.00$ payment every month, it'll take 7 years and 9 months to pay off your bill. You will have spent a total of 923.16$, or 409.92$ in interest on a 513.24$ balance.

Credit card balances really suck due to their huge interest.