David and john are friends. they go to college classes together, play sports together, and on january 1 both bought the same model of stereo system. they each paid $2,000 and put it on their credit cards. their interest rate was 1.5% per month and the minimum payment per month was $50, which was paid on the 1st day of each month.

david is the type of person who does not like debt. he wants to pay it off as soon as he can, but he still has to pay for his college classes. he decides to double the minimum amount and pay $100 every month. he is okay with sacrificing on other needs to pay the extra amount monthly.

john on the other hand, likes to have a little additional cash so he can enjoy a bit of a social life while he goes to school. he decides to pay the minimum amount of $50 each month.

both david and john decided that they would not purchase anything more with their credit card until they paid off the balance. there is no right or wrong method here, it is just personal choice.

after 1 years (12 months), let’s look at where they stand financially with their credit card information.

1. what is the balance due at the end of the first year for david?

2. what is the balance due at the end of the first year for john?

3. how much interest did david pay in the first year?

4. how much interest did john pay in the first year?