I'm thick when it comes to finances. I don't understand how interest and compound interest works, so I'm seeking help.
I have a Virgin Money Transfer principal balance of £ 5,816.21.
- Interest rate is at 23.29%
- Interest is variable.
- Balance opened at £8000 on February 2020.
- I've been paying the minimum balance only since, due to financial constraints.
My minimum monthly payment this month was £175.34
- Paid on 15/03/2022
- Interest was £104.08
My next requested minimum payment is £161.20, on 14/04/2022
My estimated interest for that payment is £113.70
The statement also explains that interest is charged on the total value of the statement, not just the outstanding balance (side question, what?)
By paying a grand total of £675.34 a month (including the minimum and an additional payment on the 30th of each month) I estimate I will pay this balance off by February 2023, with the final additional payment being £703.51
How far off am I?
Is there any more information you need in order to help me calculate the date I can pay this thing off?
Any insight here would be greatly appreciated.