Suppose your credit card balance is $16500. The minimum payment is $312, and the annual percentage...

Question

Question

Suppose your credit card balance is $16500. The minimum payment is $312, and the annual percentage rate is 20.7%.

a. If you make a constant monthly payment of $312 how long will it take you to pay off the credit card balance?

b. How much interest will you pay if you elect to make the minimum payment?

Please solve using financial calculator and provide imputs for I/Y, PV, PMT, and FV.

***I will need the answers both rounded to rounded to 2 decimal places.

Answer 1

Answer #1

a.

Calculating Time Period,

Using TVM Calculation,

N = [PV = 16,500, PMT = -312, FV = 0, I = 0.207/12]

N = 142.28 months

b.

Total Interest Paid = 142.28(312) - 16,500

Total Interest Paid = $27,891.36

Answer 2

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