Help with interest!

[niecy357]

I am confused abt APR for a BT that will expire May 09. The APR will be 16.24% and I was told on a bal of 2000.00 It would be approx $26.00 by a BOA rep is that right? Sorry not good with math calculations. Or will they go back to May 08 and add all the interest from the first day of BT?

[Anonymous]

The 16.24% interest rate wont be retro-active to the original BT date, The $26,00 quoted by the BoA rep would be the approximate monthly interest charge on the $2000 balance once the 16.24% rate kicks in, 

Just multiply 2,000x .1624 = $325/12 =$27 interest for the 1st month of the higher APR,

Each month thereafter, your monthly interest paid will decrease slightly as the principle is paid down, that's why it's best to pay more than the minimum, to minimize the interest paid,

[Cleanmachine]

Your new APR of 16.24% will be effective on the first day after your closing date in May 2009.

Another method in calculation would be to take your APR and divide by 365. This would give you your daily rate.

This daily rate would also appear on your statement.

Now you daily rate of interest is added to your balance each day and it is cumulative.

As previously suggested, I also recommend when you make your monthly payment that you add your monthly interest that was charged to the account. Why pay interest on top of interest?

[niecy357]

Thanks much! This was the first time I did a BT without PIF before interest kicked in.