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4 votes
The table shows a schedule of Mr. Kirov’s plan for paying off his credit card balance.

Mr. Kirov’s Payment Plan
Balance
Payment
New Balance
Rate
Interest
$800.00
$100
$700.00
0.012
$8.40
$708.40
$100
$608.40
0.012
$7.30
$615.70
$100
$515.70
0.012
$6.19

If Mr. Kirov continues to make monthly payments of $100 and does not make any new purchases, how many more payments will he need to make before the balance is 0?
4 payments
5 payments
6 payments
7 payments

2 Answers

5 votes

Final answer:

Mr. Kirov will need to make seven more payments in total to completely pay off his credit card balance, taking into account the monthly interest accrued.

Step-by-step explanation:

When calculating how many more payments Mr. Kirov will need to make before his credit card balance reaches $0, we notice that with each $100 payment, a part goes towards paying off the principal and the remainder covers the interest that has accrued over the month. The interest each month is calculated by multiplying the current balance by the monthly interest rate of 0.012 (1.2%). After the third payment, the balance stands at $515.70.

To calculate the interest for the next payment, we multiply $515.70 by the interest rate, 515.70 * 0.012 = $6.19. After paying the $100, the new balance would be 515.70 - 100 + 6.19 = $421.89.

Continuing this process, we sequentially subtract $100 and add the interest calculated from the new balance until the balance is paid off. This process shows that after five more payments, the balance will not be completely paid off, and there will be a small remaining balance after the sixth payment, which means Mr. Kirov will need seven payments in total to fully pay off the credit card balance.

User Maresmar
by
6.7k points
2 votes

Answer:

6

Step-by-step explanation:

User Nekisha
by
7.8k points