Question

Simon recently received a credit card with an 13% nominal interest rate. With the card, he...

Simon recently received a credit card with an 13% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $480. 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.

b. If Simon makes monthly payments of $30, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest month.

c. How much more in total payments will Simon make under the $10-a-month plan than under the $30-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent.

Homework Answers

Answer #1
a Nominal interest rate per month 1.08% 13%/12
Present Value $480
PMT $10
FV 0
Using the NPER function in excel we get, no of months as follows
NPER(1.08%,-10,480)
N = 68.11732632
N = 68 months Rounding to the nearest month
b Nominal interest rate per month 1.08%
Present Value $480
PMT $30
FV 0
Using the NPER function in excel we get, no of months as follows
NPER(1.08%,-30,480)
17.66611934
N = 18 months Rounding to the nearest month
c Total Payments @ $10 per month 68.11732632*$10 681.1732632
Total Payments @ $30 per month 17.66611934*$30 529.9835802
Extra payment or interest $ 151.19
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Simon recently received a credit card with an 18% nominal interest rate. With the card, he...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $360. 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 month.   month(s) If Simon makes monthly payments of $60, how many...
Simon recently received a credit card with an 16% nominal interest rate. With the card, he...
Simon recently received a credit card with an 16% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $300. The minimum payment on the card is only $10 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 month. month(s) If Simon makes monthly payments of $30, how many...
Simon recently received a credit card with an 12% nominal interest rate. With the card, he...
Simon recently received a credit card with an 12% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $370. 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 month. month(s) If Simon makes monthly payments of $60, how many...
Simon recently received a credit card with an 19% nominal interest rate. With the card, he...
Simon recently received a credit card with an 19% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $340. 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 month. month(s) If Simon makes monthly payments of $60, how many...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $420.00. The minimum payment on the card is only $10 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 $30, how...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $400.00. 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 $60, how...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he...
Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $378.42. 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,...
Simon recently received a credit card with a 15% nominal interest rate. With the card, he...
Simon recently received a credit card with a 15% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $373.15. The minimum payment on the card is only $10 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 $35,...
PAYING OFF CREDIT CARDS Simon recently received a credit card with an 18% nominal interest rate....
PAYING OFF CREDIT CARDS Simon recently received a credit card with an 18% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $380. 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 month. month(s) If Simon makes monthly payments...
PAYING OFF CREDIT CARDS Simon recently received a credit card with an 17% nominal interest rate....
PAYING OFF CREDIT CARDS Simon recently received a credit card with an 17% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $460. 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 monthly payments...