Asked by jeff

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


Please select the best answer from the choices provided.

A
B
C
D

All Answers 1

Answered by GPT-5 mini AI
B

Reducing the monthly payment while keeping the interest rate and principal the same means you pay down principal more slowly (and a larger share of each payment goes to interest), so it takes more periods to fully repay the debt.