How to work out interest?

edited 30 November -1 at 1:00AM in Credit Cards
1 reply 328 views
CreditCardChrisCreditCardChris Forumite
344 Posts
100 Posts Second Anniversary
✭✭
edited 30 November -1 at 1:00AM in Credit Cards
I feel silly asking this question but I just want to double check I'm reading it correctly before making this purchase. I want to make a purchase of £5,200 on my amex card which has a simple monthly interest rate of 1.74%.

I'll pay off £2,500 immediately and then pay off £700 a month so in 4 months the remaining £2,700 will be paid off.

Is the interest I paid calculated like follows:

Month 1 = £2,700.00 + 1.74% = £2,746.98 - £700 = £2,046.98.
Month 2 = £2,046.98 + 1.74% = £2,082.60 - £700 = £1,382.60.

etc etc. So in total I will have paid £118.95 interest? I think that's correct?

P.S I may even just open a 0% balance transfer card and put it on there but we'll see.
This discussion has been closed.
Latest MSE News and Guides

Energy price cap could be extended beyond 2023

New plans have just been announced by the Government

MSE News

Cheap contents insurance for tenants

DON'T assume your landlord covers you

MSE Guides

Summer sizzlers round-up

Incl £2ish sun cream & £1.50 disposable BBQs

MSE Deals