Question

In: Accounting

A visa balance is 1000. Interest rate: 2% / month, 100 paid per month. How many...

A visa balance is 1000. Interest rate: 2% / month, 100 paid per month. How many months to pay off?

Solutions

Expert Solution

It will take 9 months to pay 1000 at the interest rate of 2% / month, 100 paid per month
The same has been illustrated below
Cash Flow Diagram
Month Monthly payment Per month payment Total amount Interest rate @2% Compounded value
A B C D=B+C E= D * 2% F= D+E
1                               100                                   100                                   2                                  102
2                               102                                   100                                   202                                   4                                  206
3                               206                                   100                                   306                                   6                                  312
4                               312                                   100                                   412                                   9                                  421
5                               421                                   100                                   521                                 11                                  533
6                               533                                   100                                   633                                 14                                  646
7                               646                                   100                                   746                                 15                                  761
8                               761                                   100                                   861                                 18                                  880
9                               880                                   100                                   980                                 21                               1,000
Please do upvote if you found the answer useful.
Feel free to reach in the comment section in case of any clarification or queries.

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

A Bigbank Visa card charges interest at a nominal rate of 24% per year, compounded daily....
A Bigbank Visa card charges interest at a nominal rate of 24% per year, compounded daily. If a person has an outstanding balance of $500 on this card, (i) What will be the balance after 1 week, 30 days, 120 days and 365 days, if he makes no payments in the interim? (ii) What is the growth factor over 1 day, 1 week, 30 days and 1 year of his debt? (iii) What is the APR of this card? (iv)...
How many monthly payments remain to be paid on an 12% interest rate mortgage with monthly...
How many monthly payments remain to be paid on an 12% interest rate mortgage with monthly payments of $733.76, when the balance outstanding on the mortgage reaches $40,000?
With an initial deposit of $100, and and interest rate of 12%, the balance in a...
With an initial deposit of $100, and and interest rate of 12%, the balance in a bank account after t years is f(t) = 100(1.12)t dollars. (a) Find the average rate of change over [0, 0.5] and [0, 1]. (Round your answers to two decimal places.) (c) Estimate the instantaneous rate of change at t = 0.5 by computing the average rate of change over intervals to the left and right of t = 0.5. (Round your answers to four...
Andy borrows funds of $ 1000 with an interest rate of 12% per year with an...
Andy borrows funds of $ 1000 with an interest rate of 12% per year with an repayment period of 8 years and is repaid using the amortization method. a) After paying installments at the end of year 4, A intends to pay them off. How much money must be paid for the repayment? b) If after paying installments at the end of year 4, Andy requests that he be given an additional payment period of 6 years. i.e. the borrowing...
Suppose that the initial loan is ​$16,000 and the interest rate is 0.5​% per month. Interest...
Suppose that the initial loan is ​$16,000 and the interest rate is 0.5​% per month. Interest due is paid at end of each month. ​$8,000 of the original unpaid balance is to be repaid at the end of months two and three only. How much total interest would have been paid by the end of month three​?
What is the present value of $100 per month at a discount rate of 6%, if...
What is the present value of $100 per month at a discount rate of 6%, if the first payment is received 5 years from now and the last payment is received 18 years from now? Given a 6 percent discount rate compounded quarterly, what is the present value of a perpetuity of $100 per month if the first payment does not begin until the end of year five? You are planning to save for retirement over the next 25 years....
What is the present value of $100 per month at a discount rate of 6%, if...
What is the present value of $100 per month at a discount rate of 6%, if the first payment is received 5 years from now and the last payment is received 18 years from now?
the interest rate in the united states are 2% per year while the interest rate in...
the interest rate in the united states are 2% per year while the interest rate in the united kingdom is 1% per year the spot rate and the forward rate between the us dollars ad the british pounds are as follows. S(USD/GBP)   bid price is 1.3290 and the ask price is 1.3300 F6(USD/GBP) bid price is 1.3195 and the ask price is 1.3200 you can borrow usd 100,000 or gbp 100,000 in the united kingdom and your investment horizon is...
Principal and interest payments for a certain mortgage rate areestimated at $12 per $1000 of...
Principal and interest payments for a certain mortgage rate are estimated at $12 per $1000 of loan amount. if the property is listed at $54,000 and the buyer makes a full-price offer, what would the down payment be if the buy only wanted to spend $450 per month for principal and interest payments. Answer is 16,500, i need help knowing what to do and what everything means please, thanks. ( dont have the interest rate and loan term, not given).
4. A personal loan of $1,000 is made for a period of 18 months at an interest rate of 1.50% per month on the unpaid balance.
4. A personal loan of $1,000 is made for a period of 18 months at an interest rate of 1.50% per month on the unpaid balance. If the entire amount owed is repaid in a lump sum at the end of that time, determine: a) The effective annual interest rate b) The total amount of interest paid5. What nominal interest, compounded quarterly, is required to provide a 6% annual effective interest rate? A 12 % annual effective interest rate?6. How...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT