Question
In: Finance
(Nonannual compounding using a calculator) Dennis Rodman has a$4,000 debt balance on his Visa card...
(Nonannual compounding using a calculator) Dennis Rodman has a $4,000 debt balance on his Visa card that charges an APR of 13.1 percent compounded monthly. Dennis's current minimum monthly payment is percent of his debt balance, $200. How many months (round up) will it take Dennis to pay off his credit card if he pays the current miminum payment of $200 at the end of each month? How many months will it take Dennis to pay off his credit card?
(Round up to the nearest unit.)
Solutions
Expert Solution
The number of months is computed as follows: (Using a financial calculator BA II PLUS)
Plug the below variables in the financial calculator as follows:
PV = - 4,000
I/Y = 1.091666667 (13.1 / 12)
PMT = 200
FV = 0
Finally press CPT and then press N. It will give number of months equal to 22.69 months or 23 months (if rounded to the nearest whole number) Approximately
jeff jeffy answered 2 years agoRelated Solutions
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