Apply financial formulas to analyze and solve selected financial problems. Prepare a Word document to present financial findings in a professional manner.

The finished document requires you to focus not only on mathematics but also professional writing and formatting of a Word document.

Instructions.

The case study is to be completed in a Word document. Questions are to be solved showing the formula, substitution and final answer, as is expected on your tests.

Formulas are to be entered in Word by using the Equation Editor provided in Word. Simply type the values you calculated manually into the equations in Word. Either method will be accepted.

Please write out the final answer to each question in a sentence and include an introduction to your case as well as the original questions. All Questions are to be solved showing the work, formula, substitution and final answer.

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Paying Off a Credit Card with Regular Payments

After spending too much money on credit card interest last year, Usha applied for a new credit card that had a lower interest rate of 16.9% compounded daily. The terms of her new credit card are similar to her old one:

For any payment she makes within a month from the date of purchase, she will be charged no interest.

However, if she does not pay off the full balance, interest is charged daily on the remaining balance effective from the date of purchase.

Every month she must make a minimum payment.

On November 30, Usha completed all of her holiday shopping using her new credit card. Also, she did not make any other purchases in the following months.

a) On December 31, Usha made a payment of $100, and on the last days of January to May, respectively, she made the minimum payment of $20 that was charged on her credit card. After the May 31 payment, the balance on her card was $610.06 What was the value of all the purchases made on November 30?

b) How much longer (in complete months) would it take to pay off this debt if all future payments are the minimum payment of $20 at the end of each month?

c) How much quicker would the debt be settled by making payments of $40 at the end of each month instead?

d) After making the May 31 minimum payment, a decision was made to be debt-free in six months. What equal payments would have to made at the end of each month (starting on June 30) in order to achieve this goal?

e) If the payment plan laid out in (d) is followed, what would the balance be on the credit card after the third payment (halfway through the repayment plan)?

f) One year later on November 30 after making the final payment the credit card balance is $0.00. How much interest was paid towards the credit card since November 30 the previous year?