Question
In: Finance
You have a $4,000 balance on your credit card. The interest rate on the card is a 17.68% APR, based on monthly compounding.
You have a $4,000 balance on your credit card. The interest rate on the card is a 17.68% APR, based on monthly compounding. Assume that you are not going to add any more charges to the card. If you make monthly (end-of-the-month) payments of $265 each, how long in years will it take you to pay off the card? Input your answer rounded to the nearest 0.1 year (in other words, nearest 10th of a year).
Solutions
Expert Solution
The number of years is calculated using the NPER:
= NPER(rate,-pmt,pv)
= NPER(17.68%/12,-265,4000)
= 17.2 years
The number of years is calculated using the NPER is 17.2 years.
Where, rate is periodic rate, pmt is payment per period, pv is present value.
The number of years is calculated using the NPER is 17.2 years.
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