greg used his credit card to buy exercise equipment. the cost was $826.38. if greg pays $50 a month for 20…

greg used his credit card to buy exercise equipment. the cost was $826.38. if greg pays $50 a month for 20 months, the total interest will be $139.33. greg decided instead to pay only the minimum amount each month. that will take him 124 months and the total interest will be $1,038.08. how much would greg have saved if he had paid $50 a month instead of the minimum amount? greg would have saved $

greg used his credit card to buy exercise equipment. the cost was $826.38. if greg pays $50 a month for 20 months, the total interest will be $139.33. greg decided instead to pay only the minimum amount each month. that will take him 124 months and the total interest will be $1,038.08. how much would greg have saved if he had paid $50 a month instead of the minimum amount? greg would have saved $

Answer

Explanation:

Step1: Identify total cost with minimum - payment

The total cost when paying the minimum amount is the sum of the equipment cost and the total interest when paying minimum. The equipment cost is $826.38 and the total interest when paying minimum is $1038.08. So the total cost $C_{min}=826.38 + 1038.08$. $C_{min}=826.38+1038.08 = 1864.46$

Step2: Identify total cost with $50 - a - month payment

The total cost when paying $50 a month for 20 months is the sum of the equipment cost and the total interest when paying $50 a month. The equipment cost is $826.38 and the total interest when paying $50 a month is $139.33. So the total cost $C_{50}=826.38 + 139.33$. $C_{50}=826.38+139.33 = 965.71$

Step3: Calculate the savings

The savings $S$ is the difference between the total cost when paying the minimum amount and the total cost when paying $50 a month. So $S = C_{min}-C_{50}$. $S=1864.46 - 965.71=898.75$

Answer:

$898.75$