5. You owe $1,500 on a credit card with a 14.5% APR. The minimum payment is $80. How much goes toward principal if you make the minimum payment at the end of the first month?
Amount toward principal:
$55.63
To calculate this, first calculate the interest accrued in the first month:
$1,500 * (14.5%/12) = $18.75
Subtract the interest from the minimum payment to find the amount going towards the principal:
$80 - $18.75 = $61.25
Therefore, $61.25 will go towards the principal of the credit card debt if you make the minimum payment at the end of the first month.