To determine the cost of credit for a 2-year $5,000 credit card loan with a monthly payment of $257.67, we need to calculate the total amount paid over the 2-year period and subtract the original loan amount.
First, we need to calculate the total number of payments made over 2 years by multiplying the number of months in 2 years (24) by the monthly payment amount:
Total number of payments = 24 * $257.67 = $6,184.08
Next, we calculate the total amount paid over the 2-year period by multiplying the monthly payment by the number of payments:
Total amount paid = $257.67 * 24 = $6,184.08
Finally, we subtract the original loan amount ($5,000) from the total amount paid to find the cost of credit:
Cost of credit = $6,184.08 - $5,000 = $1,184.08
Therefore, the cost of credit for this 2-year $5,000 credit card loan with a monthly payment of $257.67 is $1,184.08.
Determine the cost of credit for a 2 year 5,000 credit card loan with a monthly payment of 257.67
1 answer
1 answer