Question

Bucky Bavasi just bought a new TV that cost $1,500. He plans to finance the purchase...

Bucky Bavasi just bought a new TV that cost $1,500. He plans to finance the purchase with his new credit card which has an 18% nominal interest rate. The minimum payment on the card is $24.16 per month. If he makes the minimum payment and makes no other charges, how many months will it take before he pays off the card?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Information provided:

Present value (PV)= $1,500

Monthly payment= $24.16

Monthly market rate= yield to maturity (I/Y)= 18%/12= 1.50% per month

The time taken to payoff the card is calculated by entering the below information in a financial calculator:

PV= -1500

PMT= 24.16

I/Y= 1.50

Press the CPT key and N to compute the time of the bond.

The value obtained is 179.86.

Therefore, it takes 179.86 months to payoff the card.

In case of any query, kindly comment on the solution.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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...
Your friend wants to purchase a new TESLA Model 3 car for $67,000. All wheel drive,...
Your friend wants to purchase a new TESLA Model 3 car for $67,000. All wheel drive, Long range battery, and dual motors. He has no savings, so he needs to finance the entire purchase amount. With no down payment, the interest rate on the loan is 10 % and the maturity of the loan is 7 years. His monthly payments will be $1112.28 each month. He earns $3000.00 a month. He has a credit card limit of $13,000 and an...
Your friend wants to purchase a new TESLA car for $65,000. All wheel drive, Long range...
Your friend wants to purchase a new TESLA car for $65,000. All wheel drive, Long range battery, and dual motors. He has no savings, so he needs to finance the entire purchase amount. With no down payment, the interest rate on the loan is 10 % and the maturity of the loan is 6 years. His monthly payments will be $1673.33. He earns $1600.00 a month. He has a credit card limit of $13,000 and an interest rate of 12%....
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,...
Question A2 Simon recently received a credit card with an 15% nominal interest rate. With the...
Question A2 Simon recently received a credit card with an 15% nominal interest rate. With the card, he purchased a new notebook for $9,888. The minimum payment on his credit card is only $200 per month. If Simon makes the minimum monthly payment and makes no other charges, advice Simon the number of months it will be for him to pay off the credit card balance. Round to the nearest month. (Total 6 marks)
You've just bought a new​ flat-screen TV for $3,000 and the store you bought it from...
You've just bought a new​ flat-screen TV for $3,000 and the store you bought it from offers to let you finance the entire purchase at an annual rate of 12 percent compounded monthly. If you take the financing and make monthly payments of $100​, how long will it take to pay off the​ loan? How much will you pay in interest over the life of the​ loan? a. The number of years it will take to pay off the loan...
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...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT