Jenson Hernandez

Credit Card Debt Reflection

This is probably one of the assignments I’ve done that I can relate to directly. I currently have a
couple of credit cards open and spend about 25% of my limit to essentially make “good credit”.
When I opened these accounts I didn’t exactly take into account the APR and how much more I
would be paying towards the principal balance. For Example, on my bank credit I currently have
a yearly APR of 14.99%. This assignment enabled me to figure out what I would be paying
monthly interest wise.

Calculating the APR doesn’t just apply to credit card debt, but also other types of loans such as
a Car loan, House loan, etc. This can allow anyone looking to take a loan of any size to consider
all the facts beforehand. How much monthly you’ll be paying and how much of that payment is
actually going towards the principal amount. There are similar concepts of APR like APY when
placing money in certain money markets or funds with a yearly return.

We used 2 mathematical formulas to calculate the yearly/monthly interest and the

monthly/duration payment plan. Using the data we already have to plug and calculate. These
concepts are not just used for the assignment, but can be used to legitimately calculate interest
on debt. Outside of the classroom I do see myself using these concepts to calculate interest and
plan durations. I see this as an unspoken, but handy new skill.