Tag: paying only the minimum

The Math Behind the Minimum: Calculating the true cost of credit card minimum payments

Most credit card companies keep their exact algorithms for determining minimum payments under wraps. However, there are whole threads of research by mathematicians and statisticians who try to break down the math behind the minimums, using something called the Bond Evaluation Formula. Quite simply, it is: ?=?(1+?)+?(1+?)2+…+?(1+?)?=?∑?=1?(1+?)−? Got it? If that’s just slightly ahead of your high-school level calculus, we…

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