Problem Statement (Financing Furniture) You are moving into your first apartment and need furniture. You decide to go to Ikea because they are fairly cheep but pretty durable. You decide to buy a bed, a mattress, a dresser, a desk with a chair, a sofa, and a dining set. In total, your bill comes to $2,275.75* after taxes and delivery. You have qualified for an Ikea Projekt Credit Card**, which has an introductory offer of 0% interest on this purchase for 12 months. After that, the purchase APR is 21.99%. You do not plan to make any additional purchases on this credit card before it is completely paid off. 1. How much would you need to pay each month in order to pay off the entire purchase within the 12 month introductory period, and avoid all interest? 2. You have determined that you can afford to budget $50 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 3. You have determined that you can afford to budget $70 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 4. How much longer does it take to pay off the purchase by paying $50 a month, than it will to pay $70 a month? How much less do you pay overall if you make $70 payments instead of $50 payments? *Go to Blackboard to see the cart with your new furniture you bought in it. **You can find the credit card disclosures on blackboard. Problem Statement (Financing Furniture) You are moving into your first apartment and need furniture. You decide to go to Ikea because they are fairly cheep but pretty durable. You decide to buy a bed, a mattress, a dresser, a desk with a chair, a sofa, and a dining set. In total, your bill comes to $2,275.75* after taxes and delivery. You have qualified for an Ikea Projekt Credit Card**, which has an introductory offer of 0% interest on this purchase for 12 months. After that, the purchase APR is 21.99%. You do not plan to make any additional purchases on this credit card before it is completely paid off. 1. How much would you need to pay cach month in order to pay off the entire purchase within the 12 month introductory period, and avoid all interest? 2. You have determined that you can afford to budget $50 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 3. You have determined that you can afford to budget $70 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 4. How much longer does it take to pay off the purchase by paying $50 a month, than it will to pay $70 a month? How much less do you pay overall if you make $70 payments instead of $50 payments? Problem Statement (Financing Furniture) You are moving into your first apartment and need furniture. You decide to go to Ikea because they are fairly cheep but pretty durable. You decide to buy a bed, a mattress, a dresser, a desk with a chair, a sofa, and a dining set. In total, your bill comes to $2,275.75* after taxes and delivery. You have qualified for an Ikea Projekt Credit Card**, which has an introductory offer of 0% interest on this purchase for 12 months. After that, the purchase APR is 21.99%. You do not plan to make any additional purchases on this credit card before it is completely paid off. 1. How much would you need to pay each month in order to pay off the entire purchase within the 12 month introductory period, and avoid all interest? 2. You have determined that you can afford to budget $50 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 3. You have determined that you can afford to budget $70 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 4. How much longer does it take to pay off the purchase by paying $50 a month, than it will to pay $70 a month? How much less do you pay overall if you make $70 payments instead of $50 payments? *Go to Blackboard to see the cart with your new furniture you bought in it. **You can find the credit card disclosures on blackboard. Problem Statement (Financing Furniture) You are moving into your first apartment and need furniture. You decide to go to Ikea because they are fairly cheep but pretty durable. You decide to buy a bed, a mattress, a dresser, a desk with a chair, a sofa, and a dining set. In total, your bill comes to $2,275.75* after taxes and delivery. You have qualified for an Ikea Projekt Credit Card**, which has an introductory offer of 0% interest on this purchase for 12 months. After that, the purchase APR is 21.99%. You do not plan to make any additional purchases on this credit card before it is completely paid off. 1. How much would you need to pay cach month in order to pay off the entire purchase within the 12 month introductory period, and avoid all interest? 2. You have determined that you can afford to budget $50 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 3. You have determined that you can afford to budget $70 per month to pay off this credit card. (a) What balance will remain at the end of your 12 month introductory period? (b) How long will it take you to pay off the credit card in full, including the first 12 months? (c) How much will you have paid in total for the purchase? (d) How much total interest did you pay on this purchase? 4. How much longer does it take to pay off the purchase by paying $50 a month, than it will to pay $70 a month? How much less do you pay overall if you make $70 payments instead of $50 payments