68 If the annual interest rate is 2099 find the differ ence

68. If the annual interest rate is 20.99%, find the differ- ence between the minimum payment and the interest owed on an unpaid balance of $1,350.84 that is 1 month overdue.

Solution

Minimum payment = Unpaid balance x Flat rate of 2% = 1350.84 x 2% = $27.02

Interest owed = Unpaid balance x Rate/12 = 1350.84 x 20.99%/12 = $23.63

.

Difference between minimum payment and interest rate:

Difference = Minimum payment - Interest owed

Difference = $27.02 - $23.63

Difference = $3.39

Note: Assuming 2% is the flat rate for minimum payment on Unpaid balance