Question

Joey realizes that he has charged too much on his credit card and has racked up $4,900 in debt. If he can pay $125 each month and the card charges 18 percent APR (compounded monthly), how long will it take him to pay off the debt? (Do not round intermediate calculations and round your final answer to 2 decimal places.).

Answer 1

60 months

Step-by-step explanation:

In this question, we use the NPER formula which is shown in the spreadsheet.

The NPER represents the time period.

Given that,

Present value = $4,900

Future value = $0

Rate of interest = 18% ÷ 12 months = 1.5%

PMT = $125

The formula is shown below:

= NPER(Rate,-PMT,PV,FV,type)

The PMT come in negative

So, after solving this, the answer would be 60 months