you have a $5841 credit card debt, and you plan to pay it off through monthly payments of $71. if you are being charged 14% interest per year, how long will it take you to repay your debt?

Answer 1

Ouch!
You better increase that payment.

i = .14/12 = .0116667
let the time be n months

5841 = 71 (1 - 1.0116667^-n)/.0116667
68.145 =71(1 - 1.0116667^-n)
.9597887 = 1 - 1.0116667^-n
1.0116667^-n = .040211267
-n = log .040211267 / log 1.0116667 = 277 months
or 23 years.

Keep in mind that the interest the first month would be
5841(.0116667) or $68.14
so if you are only paying $71, you are paying off less than $3 off per month at the start.
So in the first year of paying 71 x 12 or $852 in payments, you would have reduced your entire debt by only about $36

depressing , isn't it ????

Answer 2

wow! sure is. thanks so much sir! :]