ZuoTi.Pro
Question

corporate finance

nMany people choose to pay minimum payment on their credit card. Suppose you owe 1000 on a credit card with a 10% interest rate, and a minimum payment of $10 or 2% of the balance, which ever is greater. How soon will you pay off this debt if you make the minimum payment each month? How much total interest will you pay? If you pay equal amount each month in 10 years, how much will you pay in total? Which method pays more? What if the interest rate is 6% per year. Which recommendation will you give?


0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Request Professional Answer

Request Answer!

10 have requested this problem solution

The more requests, the faster the answer.

Request! (Login Required)

All students who have requested the answer will be notified once they are available.
Know the answer?
Add Answer to:
corporate finance
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Similar Homework Help Questions

  • 3. You have a credit card on which you currenty owe $10,000 The card has a...

    3. You have a credit card on which you currenty owe $10,000 The card has a 19 99% annual interest rate and requires a minimum monthly payment of $50 Assume that you do not incur any other purchases on the card. (12 points) a) If you only make the minimum payment, how long will it take you to pay off the card? b) If you only make the minimum payment, how much total interest will you pay? c) If you...

  • You owe ​$3629 on your credit card which has a 17.2​% APR. ​(a) How much interest...

    You owe ​$3629 on your credit card which has a 17.2​% APR. ​(a) How much interest do you get charged this month on your balance of ​$3629​? ​(b) You make a payment of ​$850. What is your new balance for the next​ month? ​(c) How many total months will it take you to pay off the debt if you continue to make ​$850 payments each month​ (the last month you would pay just what you​ owe)? ​(a) The interest is...

  • please answer 3-6 Scenario: You decide to buy a used 2014 Kawasaki Ninja 300 motorcycle for...

    please answer 3-6 Scenario: You decide to buy a used 2014 Kawasaki Ninja 300 motorcycle for $4300. You make the purchase with a credit card. Your credit card has an APR of 21.3%. You owe nothing else on this card. Questions: 1. What is the monthly interest rate? 2. How long will it take you to pay off the debt if you make payments of $100 a month? 3. How much interest will you have paid by the time you...

  • Problem 37: Simon recently received a credit card with an 18% nominal interest rate. With the...

    Problem 37: Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Amazon Kindle for $350. The minimum payment on the card is only $10 per month a. If Simon makes minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? b. If Simon makes monthly payment of $30, how many months will it be before he pays off the debt? e...

  • use excel The typical American household owes approximately $15,000 in credit card debt. Assume you owe...

    use excel The typical American household owes approximately $15,000 in credit card debt. Assume you owe this amount today and will not to put another charge on your credit card until this debt is paid off. Your credit card has an APR of 18% and minimum payments are calculated as 2% of outstanding balance or $15, whichever is greater. Using two (2) decimal places for dollar amounts, determine: a) How many years will it take to pay the entire amount...

  • Assuming you have $1,500 in your budget this month with which to pay down your credit...

    Assuming you have $1,500 in your budget this month with which to pay down your credit cards, how much should you pay on each card? (Note: The following data table is independent from the previous question.) If your answer is zero enter "0" Outstanding Required minimum Recommended debt repayment amount Card Interest rate 28% 12% 13% balance $600 2,000 3,000 payment (%) 10% 8% 10% payment (s) Department store card Discover Card VISA Card MasterCard 1 MasterCard 2 14% 4,000...

  • If the credit card has an annual interest rate of 13.6% and only the minimum monthly payment of $35 is made, how many months will it take to pay off the credit card?

    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...

  • 5-2: Future Values 5-15: Semiannual and Other Compounding periods Paying off credit cards Simon recently received...

    5-2: Future Values 5-15: Semiannual and Other Compounding periods Paying off credit cards Simon recently received a credit card with an 15% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $320. 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? Round your answer to the nearest whole. month(s)...

  • PAYING OFF CREDIT CARDS Simon recently received a credit card with an 13% nominal interest rate....

    PAYING OFF CREDIT CARDS Simon recently received a credit card with an 13% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $470. 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 month. month(s) b. If Simon makes...

  • 19. Problem 5.37 (Paying off Credit Cards) eBook Simon recently received a credit card with a...

    19. Problem 5.37 (Paying off Credit Cards) eBook Simon recently received a credit card with a 13% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $500.00. 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....

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT