Question

Carla owes $3,760 on her Electronics Boutique credit card with a 22.4% interest rate. She owes $3,124 on her Miscellaneous Goods credit cards which has a 18.7% interest rate. What is the total monthly payment needed to pay off both cards in three years, assuming she makes fixed payments and does not charge any more purchases with the card?

Question 4 options:

1)
$251.30


2)
$258.42


3)
$191.22


4)
$264.33

Answer 1

The correct answer to this question would be answer choice 2. $258.42.
For this question all I did was 144.38+114.04 and that gave me 258.42

Answer 2

B. 258.4

Explanation:

Carla owes $3,760 on her Electronics Boutique credit card with a 22.4% interest rate. She owes $3,124 on her Miscellaneous Goods credit cards which has a 18.7% interest rate. What is the total monthly payment needed to pay off both cards in three years, assuming she makes fixed payments and does not charge any more purchases with the card?

We solve for the monthly payment on the first card, and then find the one on the second card. We then add the two to get the monthly payment carla is going to pay for three years

To solve we use the equation below

`A=P(i(1+i)^n)/((1+i)^n-1)`

A=the amount per month

n=36 payments

i=periodic interest 22.4%/12=0.018

`A=3760(0.018(1+0.018)^(36))/((1+0.018)^(36)-1)`

142.81

second card i=.016

`A=3124(0.016(1+0.16)^(36))/((1+0.016)^(36)-1)`

114.16

add the interest on the first card with the second

114.16+142.81=

256.97 closed to $258.4