Question

You have a credit card balance of $2,000 and are able to make payments of $50...

You have a credit card balance of $2,000 and are able to make payments of $50 per month. Assume the credit card company charges an annual interest rate of 14% (1.16667% per month). How many months will it take to pay off the balance. Assume no other purchases. Just write the two digit number...no label.

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Answer #1

Information provided:

Present value= $2,000

Monthly payment= $50

Interest rate= 14%/12= 1.1667

The time to pay off the credit card balance is calculated by entering the below in a financial calculator:

PV= -2,000

PMT= 50

I/Y= 1.1667

Press the CPT key and N to compute the time to pay off the credit card balance.

The value obtained is 54.19.

Therefore, the time to pay off the credit card balance is 54.19 months.

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

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