Question

You have recently charged 1,000 on your credit card. You can only afford to make the minimum payment of $20 per month. The interest rate on the credit card is 1.5%per month. How long will you need to pay off the $1000?

A) 2.25years

B) 5.00 years

C) 7.75 years

I know the answer is C but I don't know how to calculate it. I want the step of this question.

Answer 1

Number of years = 7.76 years(very close to 7.75 years). The formulae as per excel is given below . Pl refer the same for calculations.

Answer is C) 7.75

The manual formula is a complicated one. Hence used excel to solve the problem.

Formulae