Question

Frank has four different credit cards, the balances and interest information of which are outlined in the table below. He would like to consolidate his credit cards to a single credit card with an APR of 18% and pay off the balance in 24 months. What will his monthly credit card payment be?

Credit Card
Balance
APR
A
$2,380
19%
B
$4,500
15%
C
$1,580
17.50%
D
$900
21%
a.
$390.00
b.
$462.91
c.
$467.29
d.
$52.00


Please select the best answer from the choices provided

A
B
C
D

Answer 1

C

Monthly payment = (0.18/12 * 9360) / (1 - (1 + 0.18/12)^(-24))
= (0.015 * 9360) / (1 - (1.015)^(-24)) ≈ $467.29