Tarek has been thinking about getting a credit card, but he is
skeptical that a credit card can be a useful spending tool for him.
Instead, Tarek has always used a debit card. His reasoning is that
using a debit card provides protection from overspending; after
all, he can only spend what is in his account.
Assume Tarek now has a credit card and he carries a $2,000monthly
balance. If the credit card company uses a 4% multiplier to
determine the minimum monthly payment and the card has a 15% APR
and 30-day billing cycle, what will be the minimum monthly payment?
How much of the first payment will go towards paying
interest?
The minimum monthly payment will be $ .
Amount of first payment that will go towards paying interest is $
.
Monthly balance = $2,000
Using 4% multiplier
Annual percentage rate = 15% = 15/12 = 1.25%
First payment towards paying interest = $2,000*1.25% = $24
Hence, tarek has to owe = $2,000 + $25 = $2,025
Minimum monthly payment = $2025 * 4% = $81
Tarek has been thinking about getting a credit card, but he is skeptical that a credit...
Gary has just used his credit card to buy a new watch. He got the watch on sale for $235. The regular price was $290. He used a credit card that has an Annual Percentage Rate of 20%. If Gary makes the minimum monthly payment each month of $10: 19. How much will Gary end up paying for his new watch? 20. How long will it take Gary to pay for his watch? 21. What is the total amount of...
Michael has a credit card debt of $60,000 that has a 10% APR, compounded monthly. The minimum monthly payment only requires him to pay the interest on his debt. He receives an offer for a credit card with an APR of 9% compounded monthly. If he rolls over his debt onto this card and makes the same monthly payment as before, how long will it take him to pay off his credit card debt?
n has been using his credit card too much . His o use only cash until the balance of $8574 e credit card company charges 18% compounded monthly. What is the effec t rate? How much interest will he owe e first month's payment? If he makes monthly is paid off. The car in th payments of $225, how long until it is paid ofl South Florida Contributed by Paul R. McCright, University of
16 Credit Card Offers Randy just cancelled his credit card with a large bank. A week later, a representative of the bank called Randy with an offer of a "better" credit card that will advance Randy $2,000 when he accepts it. Randy could not refuse the offer and several days later receives a check for $2,000 from the bank. With this money, Randy decides to buy a new computer. At the next billing cycle (a month later), the $2,000 advance...
Hamed only made the minimum required payment on his credit card in May. Thus he started the next 30-day billing period (June 1) with a balance of $587. Hamed used his credit card to book a holiday on June 10 for $2,500, and sent in another payment of $800 on June 25. His annual interest rate is 23%, compounded daily. How much interest will he be charged for the month of June? Using average daily balance method. a) $40.54 b)...
Paolo is paying off a credit card with a current balance of $450. The interest rate on the card is 23%. The minimum monthly payment is $25, but he plans to make monthly payments of $45. He will not be using the card to accumulate further debt. Approximately how many months will it take to pay off the balance?
Part 2: Credit Cards Another type of personal loan is a credit card. A financial institution allows you to charge a purchase to your account, and you are required to pay the financial institution at a later time. As with other loans, credit cards charge interest. Interest rates can range from 3% - 22%. When you are paying for debt on a credit card, the financial institution will require a minimum balance be paid each month. The higher the interest rate that is charged...
Hak Young has gone on to accumulate other credit card debt on top of what he owes from his Disney Land vacation and his total debit is now $13,864.82. He is getting worried about his debt and is determined to pay it off completely. With all conditions of the account being the same as before, what would Hak Young’s minimum payment have to be in order to pay off his debt in 5 years? [1] What will be the total interest paid?...
Simon recently received a credit card with a 15% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $351.59. The minimum payment on the card is only $10 per month. a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) b. If Simon makes monthly payments of...
Simon recently received a credit card with a 21% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $368.24. The minimum payment on the card is only $20 per month. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) If Simon makes monthly payments of $65, how...