.21/12 = .0175 (monthly rate)
5 years = 60 months
8000 = p(1 - 1.0175^-60 )/.0175
p = 216.43
b) what do you think?
c) lump payment = 8000(1.0175)^36 - 216.43(1.0175^36 - 1)/.0175
= ....
Stacey has a $8,000 balance on her credit card that has an interest rate of 21%,
compounded monthly.
(a) If she decides to pay it off over 5 years with equal monthly payments, how much should
each payment be?
(b) How much interest will Stacey pay to the credit card company?
(c) If instead she wants to completely pay off her debt after 3 years (i.e. 2 years early),
what lump sum payment must she make?
1 answer
1 answer