a person owes $200 on credit card a with an apr of 20%, and owes $400 on credit card b with an apr of 10%…

a person owes $200 on credit card a with an apr of 20%, and owes $400 on credit card b with an apr of 10%. after paying the minimum balance due, the person has $100 to use toward paying money owed. which of the following is recommended? put $100 in a savings account. pay $50 to credit card a and $50 to credit card b. pay $100 to credit card b. pay $100 to credit card a.

a person owes $200 on credit card a with an apr of 20%, and owes $400 on credit card b with an apr of 10%. after paying the minimum balance due, the person has $100 to use toward paying money owed. which of the following is recommended? put $100 in a savings account. pay $50 to credit card a and $50 to credit card b. pay $100 to credit card b. pay $100 to credit card a.

Answer

Explanation:

Step1: Analyze interest rates

Credit card A has an APR of 20% and credit card B has an APR of 10%. Higher - APR cards accrue more interest over time. So, it is more beneficial to pay off the higher - APR card first.

Step2: Allocate payment

The person has $100 to pay towards the debt. Since credit card A has a higher APR (20%), the $100 should be paid to credit card A.

Answer:

Pay $100 to credit card A.