Question

Consider a credit card with a balance of $8500 and an APR of 15.99%. In order to pay off the balance in 3 years, what monthly payment would you need to make?

Answer 1

The monthly payment which need to make is $ 151.305

Explanation:

Given as :

The balance in credit card = $ 8500

The annual rate = 15.99 %

The time period = 3 years

From compounded method

Amount = Principal × (
`(1+(\textrm rate)/(100))^(\textrm Time)`)

Or, 8500 = p × (
`(1+(\textrm 15.99)/(100))^(\textrm 3)`)

or, 8500 = p × (1.1599)³

or, 8500 = p × 1.56049

∴ p =
`(8500)/(1.56049)`

I.e p = 5447.007

Now The months in 3 years = 3 × 12 = 36 months

So , The monthly payment =
`(5447.007)/(36)` = $ 151.305

Hence The monthly payment which need to make is $ 151.305 Answer