A Bigbank Visa card charges interest at a nominal rate of 24% per year, compounded daily....

A Bigbank Visa card charges interest at a nominal rate of 24% per year,

compounded daily. If a person has an outstanding balance of $500 on this card,

(i) What will be the balance after 1 week, 30 days, 120 days and 365 days, if he makes no

payments in the interim?

(ii) What is the growth factor over 1 day, 1 week, 30 days and 1 year of his debt?

(iii) What is the APR of this card?

(iv) How long before the outstanding balance becomes $1,000?

Solutions

Expert Solution

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

For an interest rate of 8% per year compounded monthly, what is the nominal interest rate...

For an interest rate of 8% per year compounded monthly, what is the nominal interest rate for one year?

The annual interest rate on a credit card is 18% with interest compounded monthly. If a...

The annual interest rate on a credit card is 18% with interest compounded monthly. If a payment of $100 is made at the end of each month, how many months will it take to pay off an unpaid balance of $2,583.56 (assuming no additional purchases are made)?

Given a nominal interest rate of 6.5% compounded semi-annually, compute: a) The equivalent nominal rate of...

Given a nominal interest rate of 6.5% compounded semi-annually, compute: a) The equivalent nominal rate of discount compounded quarterly b) The equivalent constant force of interest

You have been offered a credit card that charges an interest rate of 9% per semiannual...

You have been offered a credit card that charges an interest rate of 9% per semiannual period. By regulation, they must disclose (in the fine print) an APR to their customers. What is the APR they disclose and what is their EAR?

Simon recently received a credit card with a 15% nominal interest rate. With the card, he...

Simon recently received a credit card with a 15% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $363.75. The minimum payment on the card is only $10 per month. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. ______month(s) If Simon makes monthly payments of $35, how...

Simon recently received a credit card with a 20% nominal interest rate. With the card, he...

Simon recently received a credit card with a 20% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $410.00. The minimum payment on the card is only $20 per month. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. ? month(s) If Simon makes monthly payments of $60,...

Jim recently received a credit card with a 15% nominal interest rate. With the card, he...

Jim recently received a credit card with a 15% nominal interest rate. With the card, he purchased a new computer for $2,000.00. The minimum monthly payment on the card is $70 per month. If he makes the minimum monthly payment and makes no other charges, how many months will it take him to pay off the card? 28.57 months 35.57 months 50.25 months 67.20 months 70.57 months

Simon recently received a credit card with a 12% nominal interest rate. With the card, he...

Simon recently received a credit card with a 12% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $384.15. The minimum payment on the card is only $10 per month. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. If Simon makes monthly payments of $35, how many...

Simon recently received a credit card with a 12% nominal interest rate. With the card, he...

Simon recently received a credit card with a 12% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $353.81. The minimum payment on the card is only $10 per month. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) If Simon makes monthly payments of $35, how...

Simon recently received a credit card with an 13% nominal interest rate. With the card, he...

Simon recently received a credit card with an 13% nominal interest rate. With the card, he purchased an Apple iPhone 5 for $460. The minimum payment on the card is only $20 per month. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest month. month(s) If Simon makes monthly payments of $60, how many...

Subjects