Question

Hello!

Please let me know, thank you!

You have a credit card with a balance of $13,600 and an APR of 18 percent compounded monthly. You have been making monthly payments of $260 per month, but you have received a substantial raise and will increase your monthly payments to $335 per month. How many months quicker will you be able to pay off the account?

37.39 Months

36.05 Months

40.06 Months

11.71 Months

34.33 Months

Thank you!

Answer 1

first, we find a number of months taking to repay 13600 when a monthly payment is 260

formula is

L=13600

r=18%=0.18

n=12 for monthly compound

PMT=260

.....months

.

.

.

.

.

now we find a number of months taking to repay 13600 when a monthly payment is 335

formula is

L=13600

r=18%=0.18

n=12 for monthly compound

PMT=335

.....months

.

.

.

months quicker will you be able to pay off the account