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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?

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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
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ekkarill92 answered 2 years ago
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