Question

Suppose your AMEX card calculates finance charges using an APR of 16.5%. Your statement sows a balance of $900, and your minimum monthly payment is 6% of that month’s balance. What is your balance after 18 month’s if you make no more charges and make only the minimum payment? And how long will it take to get your balance under $100

Answer 1

Part -A
Balance after 18 months , if no further charges make and make payment of minimum balance only.
Months	Balance	interest	Minimum payment	Balance
A	B= Opening/E	C=B x 16.5%/12	D=B x 6%	E=B+C-D
1	900.00	12.38	54.00	858.38
2	858.38	11.80	51.50	818.68
3	818.68	11.26	49.12	780.81
4	780.81	10.74	46.85	744.70
5	744.70	10.24	44.68	710.26
6	710.26	9.77	42.62	677.41
7	677.41	9.31	40.64	646.08
8	646.08	8.88	38.76	616.20
9	616.20	8.47	36.97	587.70
10	587.70	8.08	35.26	560.52
11	560.52	7.71	33.63	534.59
12	534.59	7.35	32.08	509.87
13	509.87	7.01	30.59	486.29
14	486.29	6.69	29.18	463.80
15	463.80	6.38	27.83	442.34
16	442.34	6.08	26.54	421.89
17	421.89	5.80	25.31	402.37
18	402.37	5.53	24.14	383.76
Answer is $ 383.76
Part B
How long it will take to balance under 100$
Months	Balance	interest	Minimum payment	Balance
A	B	C=B x 16.5%/12	D=B x 6%	E=B+C-D
1	900.00	12.38	54.00	858.38
2	858.38	11.80	51.50	818.68
3	818.68	11.26	49.12	780.81
4	780.81	10.74	46.85	744.70
5	744.70	10.24	44.68	710.26
6	710.26	9.77	42.62	677.41
7	677.41	9.31	40.64	646.08
8	646.08	8.88	38.76	616.20
9	616.20	8.47	36.97	587.70
10	587.70	8.08	35.26	560.52
11	560.52	7.71	33.63	534.59
12	534.59	7.35	32.08	509.87
13	509.87	7.01	30.59	486.29
14	486.29	6.69	29.18	463.80
15	463.80	6.38	27.83	442.34
16	442.34	6.08	26.54	421.89
17	421.89	5.80	25.31	402.37
18	402.37	5.53	24.14	383.76
19	383.76	5.28	23.03	366.02
20	366.02	5.03	21.96	349.09
21	349.09	4.80	20.95	332.94
22	332.94	4.58	19.98	317.54
23	317.54	4.37	19.05	302.86
24	302.86	4.16	18.17	288.85
25	288.85	3.97	17.33	275.49
26	275.49	3.79	16.53	262.75
27	262.75	3.61	15.76	250.60
28	250.60	3.45	15.04	239.01
29	239.01	3.29	14.34	227.95
30	227.95	3.13	13.68	217.41
31	217.41	2.99	13.04	207.35
32	207.35	2.85	12.44	197.76
33	197.76	2.72	11.87	188.62
34	188.62	2.59	11.32	179.89
35	179.89	2.47	10.79	171.57
36	171.57	2.36	10.29	163.64
37	163.64	2.25	9.82	156.07
38	156.07	2.15	9.36	148.85
39	148.85	2.05	8.93	141.97
40	141.97	1.95	8.52	135.40
41	135.40	1.86	8.12	129.14
42	129.14	1.78	7.75	123.17
43	123.17	1.69	7.39	117.47
44	117.47	1.62	7.05	112.04
45	112.04	1.54	6.72	106.86
46	106.86	1.47	6.41	101.91
47	101.91	1.40	6.11	97.20
Answer is 47 months