3. Suppose you have a credit card with a balance of $5200 and an interest rate...

  

Transcribed Image Text:

3. Suppose you have a credit card with a balance of $5200 and an interest rate of 24.3% APR. The minimum payment is $105. The amount of interest due each month is figured as current balance, where r is the rate (decimal form) and n is 12. A) Fill in the table, making minimum payments. Month Interest 1 2345678 10 11 12 Current balance $5200.00 $5200.30 $105.30 Payment Amount applied to principal $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 -$0.30 B) Will you ever be out of debt with the credit card company? Explain. (Hint: Use the Present value formula and solve for n). Calculation: C) Suppose you chose to pay $150 per month instead. Will you ever be out of debt with the credit card company? Explain. (Hint: Use the Present value formula and solve for n). Calculation: 3. Suppose you have a credit card with a balance of $5200 and an interest rate of 24.3% APR. The minimum payment is $105. The amount of interest due each month is figured as current balance, where r is the rate (decimal form) and n is 12. A) Fill in the table, making minimum payments. Month Interest 1 2345678 10 11 12 Current balance $5200.00 $5200.30 $105.30 Payment Amount applied to principal $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 $105 -$0.30 B) Will you ever be out of debt with the credit card company? Explain. (Hint: Use the Present value formula and solve for n). Calculation: C) Suppose you chose to pay $150 per month instead. Will you ever be out of debt with the credit card company? Explain. (Hint: Use the Present value formula and solve for n). Calculation:

Answer rating: 100% (QA)

Question a Question b PV Credit card balance 5200 r Monthly interest rate 24312 2025 P Monthly payme... View the full answer