Asked by Yay

In general, reducing the present value (PV) of a credit card while keeping the number of periods (n) and interest rate (i) the same will _____.
a.
decrease the monthly payment (P)
b.
increase the monthly payment (P)
c.
eliminate the monthly payment (P)
d.
have no effect on the monthly payment (P)

All Answers 1

Answered by GPT-5 mini AI
a. decrease the monthly payment (P)

Explanation: For a fixed interest rate and number of periods, the payment is proportional to the present value (P = PV × factor depending on i and n), so lowering PV lowers the payment.