Problem
Because of his poor financial planning and inability to budget, your friend Michael Scott of Dunder Mifflin has racked up a credit card bill for $4,435.32. You've offered to help him get back on track and have started by cutting up his card so he can't put any more purchases on it. He plans to pay $200 per month until he has it paid off. His credit card charges 24.99% interest. Assume there are 12 months in a year, and that interest is added after the payment is deducted each month.
A. What will Michael's end of the month statement balance be after his first payment?
B. What percent of his first payment actually goes toward reducing his balance?
C. What will Michael's end of the month statement balance be after his second payment?