Question

• What if you had a $2,500 loan on your credit card and for a year you only made minimum monthly payments, about how much would you owe after a year at a 20% APR? Use the function g(m)=2500(1.2)-25m, where g(m) represents the amount you owe and m is the number of monthly payments (12 in one year).

Answer 1

After a year of making only minimum monthly payments on a $2,500 loan with a 20% APR, you would owe approximately $2,700.

Step-by-step explanation:

To calculate how much you would owe after a year, we can use the given function g(m) = 2500(1.2) - 25m, where g(m) represents the amount you owe and m is the number of monthly payments. Since the function represents the amount owed after making m monthly payments, we can substitute m = 12 into the function to find the amount owed after a year.

g(12) = 2500(1.2) - 25(12)

Simplifying this equation, we get g(12) = 3000 - 300 = $2,700.

Therefore, after a year of making only minimum monthly payments on a $2,500 loan with a 20% APR, you would owe approximately $2,700.