While on Spring Break, you have decided you have had enough of the beach, so you enter the prestigious Cancun Bond Valuation World Championship, which, being a Michigan State student, you win easily. Your grand prize is $500. However, you go a little overboard in celebrating, and you have to put $1500 on your credit card to pay for the festivities (your previous balance was 0). You still have the money that you won, which you decide to pay toward your credit card balance as soon as you get home. The annual interest rate on your credit card is 18% compounding monthly (i.e. monthly interest is 18%/12). If you make monthly payments of $25, how long will it take to pay the credit card balance to zero? 

Question 23 options: 

5.13 years 

1.99 years

12.89 years 

61.54 years

Answer rating: 100% (QA)

The detailed answer for the above question is provided below To find out ... View the full answer