Question

You have $1,000 on your credit card and your credit card company charges 24% annual rate on the money that you owe to it. You decided to make a payment of $200 each month at the end of the month. How much money do you still owe to your credit company after making 2 monthly payments?

Answer 1

Credit card Loan amount = $1000

Calculating the Outstanding Balance after 2 payments:-

Where, C= Monthly Loan Payment = $200

r = Periodic Interest rate = 24%/12 = 2%

n= no of periods payment already made = 2 months

P = Loan Amount = $1000

Outstanding Balance = $636.40

So, money you still owe to your credit company after making 2 monthly payments is $636.40

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