Final answer:
The question relates to the time it will take Joey to pay off a credit card balance of $5,700 with an 18% APR if he makes monthly payments of $125. This involves understanding the concept of APR and the effect of compounded interest on credit card debts, which are key considerations in personal finance and debt management.
Step-by-step explanation:
The student wants to know how long it will take Joey to pay off a credit card debt of $5,700 with an 18 percent APR (annual percentage rate), with monthly payments of $125. To solve this, we can use the formula for the payment of an installment loan or the amortization formula. However, the calculation can become quite complex, as it involves finding the number of periods (n) for a payment (PMT), present value (PV), APR, and compounded interest. This is not directly solvable without financial calculator or software designed to handle such formulas. The key factors in this calculation are the balance, the monthly payment amount, and the APR. The time to pay off the debt would typically be calculated using financial software or a specialized calculator. It's important to note that depending on the minimum payment policy, if the minimum payment is lower than the fixed payment of $125, it could take longer to pay off due to the way that minimum payments are structured to cover interest first, and generally pay down the principal at a slower rate. Credit cards and their associated debts are a significant part of the financial situation for many in the United States, affecting borrowing habits and financial well-being. Understanding the terms of credit and the implications of various interest rates and payoff strategies is crucial for managing personal finance responsibly.