Question

As of today, Joe owns debt on two credit cards: Citi $1,900 and Amex $3,260. He is not charging additional purchases because he wants to get this debt all paid off. Both cards have an APR of 14.4%. First monthly payback will begin one month from now. Part 1 Attempt 1/3 for 10 pts. How long (# of months, keep the decimal) does it take to pay off Citi? if he only makes monthly minimum payments of $29?

Answer 1

It will take Joe around 8.3 years to pay off his Citi credit card debt by making monthly minimum payments of $29.

Step-by-step explanation:

Joe's first credit card, Citi, has a balance of $1,900. Since he is making monthly minimum payments of $29, it will take him several months to pay off the debt. The minimum payment is a fixed amount, so it will not decrease as the balance decreases. With an APR of 14.4%, including principal and interest, it would take Joe around 99.25 months (approximately 8.3 years) to pay off the Citi credit card debt.