Today is December 31st, 2017. Mr. Barrett owns a Chase Sapphirecredit card. The credit card...

Today is December 31st, 2017. Mr. Barrett owns a Chase Sapphire credit card. The credit card has 12% APR with monthly billing cycles. This credit card has no minimum monthly payment requirement (a special promotion). Mr. Barrett only made one transaction using this credit card. On Jan. 1st, 2016, he spent $2,000 to buy an iMac Pro. He has not paid back any money to Chase yet. Please help Mr. Barrett calculate how much money he owes to Chase as of today, which is the end of 24th billing cycle since Jan. 1st, 2016.

Mr. Barrett cows to Chase $______ as of today, which is the end of 8th billing cycle since Jan. 1st, 2016. (Round to nearest cent.)

Solutions

Expert Solution

1. Amount owed as of today after 8 months= Amount spent * (1 + Monthly Interest)^Total Months

Amount owed as of today after 8 months = 2000 * (1 + 12%/12)^8

Amount owed as of today after 8 months = 2000 * 1.01^8

Amount owed as of today after 8 months= $2165.71

2. Amount owed as of today after 24 months= Amount spent * (1 + Monthly Interest)^Total Months

Amount owed as of today after 24 months = 2000 * (1 + 12%/12)^24

Amount owed as of today after 24 months = 2000 * 1.01^24

Amount owed as of today after 24 months= $2539.47

*in question they asked for 24 months but in the last line they asked for amount owed after 8 months. so i calculated for both months Pleas choose answer accordingly

jeff jeffy answered 2 years ago

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