Question

#twentyeight You have a credit card with a balance of $15,700 and an APR of 18.7...

#twentyeight

You have a credit card with a balance of $15,700 and an APR of 18.7 percent compounded monthly. You have been making monthly payments of $295 per month, but you have received a substantial raise and will increase your monthly payments to $370 per month. How many months quicker will you be able to pay off the account?

10.79 months

41.39 months

38.01 months

39.91 months

44.34 months

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Answer #1


Correct option is > 44.34 months

Using financial calculator BA II Plus - Input details:

At $295

At $370

FV = Future Value =

$0.00

$0.00

PV = Present Value =

-$15,700.00

-$15,700.00

I/Y = Rate / Frequency of compounding = 18.7/12 =

1.5583333333

1.5583333333

PMT = Payment or coupon or regular payment / frequency =

$295.00

$370.00

CPT > N = Total number of period in months =

                   114.35

                     70.00

Difference = 114.35 - 70.00 = 44.34 months

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