Question

1) Your credit card balance is $1,000 now with 14 percent APR compounded monthly. Your minimum payment is $20. If you don’t use your credit card and continue paying the minimum, approximately, how long will it take to pay off the balance?

		6.29 yrs
		8 yrs
		5.21 yrs
		7 yrs

2) OZ Inc. has a bond issue outstanding with a $1,000 par value and a maturity of 15 years. The annual coupon rate is 10.0% with semi-annual coupon payments. The bonds are currently selling for 117.5% of par value. The bonds may be called in 5 years from now for $1100. What is the quoted annual yield-to-call for these bonds?

5.75 percent

7.43 percent

6.23 percent

8.25 percent

Answer 1

1)

Hence, correct option is 6.29 years (75.48/12)