Question

One of your customers is delinquent on his accounts payable balance. You've mutually agreed to a repayment schedule of $500 per month. You will charge 1.95 percent per month interest on the overdue balance. If the current balance is $18,500, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. 32.16.) Months for account to be paid off

Answer 1

It will take 67 months to repay the amount in full. following is the schedule

Months	Principal	Repayment	Interest	Principal outstanding
1	18500	500	360.75 (18500*1.95%)	18360.75 (18500-(500-360.75)
2	18360.75	500	358.034625	18218.78
3	18218.78	500	355.2663002	18074.05
4	18074.05	500	352.443993	17926.49
5	17926.49	500	349.5666509	17776.06
6	17776.06	500	346.6332006	17622.69
7	17622.69	500	343.642548	17466.34
8	17466.34	500	340.5935777	17306.93
9	17306.93	500	337.4851525	17144.42
10	17144.42	500	334.3161129	16978.73
11	16978.73	500	331.0852771	16809.82
12	16809.82	500	327.79144	16637.61
13	16637.61	500	324.4333731	16462.04
14	16462.04	500	321.0098239	16283.05
15	16283.05	500	317.5195155	16100.57
16	16100.57	500	313.961146	15914.53
17	15914.53	500	310.3333884	15724.87
18	15724.87	500	306.6348894	15531.5
19	15531.5	500	302.8642698	15334.37
20	15334.37	500	299.020123	15133.39
21	15133.39	500	295.1010154	14928.49
22	14928.49	500	291.1054852	14719.59
23	14719.59	500	287.0320422	14506.62
24	14506.62	500	282.879167	14289.5
25	14289.5	500	278.6453108	14068.15
26	14068.15	500	274.3288943	13842.48
27	13842.48	500	269.9283078	13612.41
28	13612.41	500	265.4419098	13377.85
29	13377.85	500	260.868027	13138.72
30	13138.72	500	256.2049536	12894.92
31	12894.92	500	251.4509501	12646.37
32	12646.37	500	246.6042437	12392.98
33	12392.98	500	241.6630264	12134.64
34	12134.64	500	236.6254554	11871.26
35	11871.26	500	231.4896518	11602.75
36	11602.75	500	226.2537	11329.01
37	11329.01	500	220.9156472	11049.92
38	11049.92	500	215.4735023	10765.4
39	10765.4	500	209.9252356	10475.32
40	10475.32	500	204.2687777	10179.59
41	10179.59	500	198.5020189	9878.093
42	9878.093	500	192.6228082	9570.716
43	9570.716	500	186.628953	9257.344
44	9257.344	500	180.5182176	8937.863
45	8937.863	500	174.2883228	8612.151
46	8612.151	500	167.9369451	8280.088
47	8280.088	500	161.4617155	7941.55
48	7941.55	500	154.860219	7596.41
49	7596.41	500	148.1299933	7244.54
50	7244.54	500	141.2685281	6885.808
51	6885.808	500	134.2732644	6520.082
52	6520.082	500	127.1415931	6147.223
53	6147.223	500	119.8708541	5767.094
54	5767.094	500	112.4583358	5379.552
55	5379.552	500	104.9012734	4984.454
56	4984.454	500	97.19684818	4581.651
57	4581.651	500	89.34218672	4170.993
58	4170.993	500	81.33435936	3752.327
59	3752.327	500	73.17037937	3325.498
60	3325.498	500	64.84720177	2890.345
61	2890.345	500	56.3617222	2446.706
62	2446.706	500	47.71077578	1994.417
63	1994.417	500	38.89113591	1533.308
64	1533.308	500	29.89951306	1063.208
65	1063.208	500	20.73255357	583.9404
66	583.9404	500	11.38683836	95.32727
67	95.32727	95.32727	1.85888171	0