SOLUTION: You have $2,500 on a credit card that charges a 17% interest rate. If you want to pay off the credit card in 4 years, how much will you need to pay each month( assuming you don’t
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Question 1207204: You have $2,500 on a credit card that charges a 17% interest rate. If you want to pay off the credit card in 4 years, how much will you need to pay each month( assuming you don’t charge anything new to the card)?
Found 2 solutions by MathLover1, math_tutor2020:
Answer by MathLover1(20850) (Show Source): You can put this solution on YOUR website!
given:
present value
desired future value
interest rate %=
years
months
find monthly payment using formula:
You must make monthly payments of $ to pay off your credit card balance of $ in months or years.
This assumes you do not make any additional charges during this period and make your payments on time.
Answer by math_tutor2020(3817) (Show Source): You can put this solution on YOUR website!
Answer: $72.14
Work Shown
Monthly payment formula
P = (L*i)/(1 - (1+i)^(-n))
where,
P = monthly payment
L = loan amount
i = interest rate per month
n = number of months
In this case
L = 2500
i = 0.17/12
n = 4*12 = 48
Let's determine the monthly payment
P = (L*i)/(1 - (1+i)^(-n))
P = (2500*0.17/12)/(1 - (1+0.17/12)^(-48))
P = 72.137605768506
P = 72.14
You can use an online calculator such as this to confirm.
https://www.calculatorsoup.com/calculators/financial/loan-calculator.php
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