Author Question: Use PMT = to determine the regular payment amount, rounded to the nearest dollar. Suppose your ... (Read 145 times)

darbym82 · **on:** Feb 2, 2020

Use PMT =

to determine the regular payment amount, rounded to the nearest dollar.

Suppose your credit card has a balance of $2500 and an annual interest rate of 19%. You decide to pay off the balance over three years. If there are no further purchases charged to the card,
(a) How much must you pay each month?
(b) How much total interest will you pay?
Now suppose you instead get a bank loan at 11.5% with a term of four years.
(c) How much will you pay each month? How does this compare with your credit-card payment?
(d) How much total interest will you pay? How does this compare with your credit-card interest?
◦ (a) $66
(b) $124
(c) $92, which is a higher monthly payment
(d) $812, which is more interest.
◦ (a) $92
(b) $1916
(c) $66, which is a lower monthly payment
(d) $668, which is less interest.
◦ (a) $92
(b) $812
(c) $66, which is a lower monthly payment
(d) $668, which is less interest.
◦ (a) $66
(b) $668
(c) $92, which is a higher monthly payment
(d) $812, which is more interest.

Pamela.irrgang@yahoo.com · **Reply #1 on:** Feb 2, 2020

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