1. What is the Monthly Interest Calculation?

This calculator determines the monthly interest you would pay on a credit card balance using the lowest APR available in 2015. It helps understand minimum interest costs for credit card debt.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( P \) — Principal balance (current amount owed)
• \( R \) — Monthly interest rate (APR ÷ 12)
• \( I \) — Monthly interest charge

Explanation: The calculation converts annual percentage rate (APR) to a monthly rate by dividing by 12, then applies it to your balance.

3. Importance of Interest Calculation

Details: Understanding monthly interest helps with debt repayment planning and comparing credit card costs. The 2015 lowest APR provides a baseline for minimum interest expectations.

4. Using the Calculator

Tips: Enter your current credit card balance and the card's APR (default is 11.99%, the lowest 2015 rate). All values must be valid (balance > 0, APR ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: Why use the 2015 lowest APR?
A: It represents the most favorable interest rate available that year, useful for comparison with current rates.

Q2: Does this include compounding interest?
A: No, this calculates simple monthly interest. Actual credit cards typically use daily compounding.

Q3: What was the average APR in 2015?
A: While the lowest was 11.99%, average rates were typically between 15-20% in 2015.

Q4: How can I reduce my interest payments?
A: Paying more than the minimum, transferring to lower APR cards, or negotiating with your issuer can help.

Q5: Are there cards with 0% APR?
A: Some cards offer introductory 0% APR periods, but these are temporary promotions, not standard rates.