Final answer:
The monthly payment amount for a $7,000 credit card debt to be paid off in 5 years at a 24.99% interest rate is approximately $188.56. The total interest you will pay to the bank is approximately $2713.60.
Step-by-step explanation:
To calculate the monthly payment amount, we can use the loan calculator formula. The formula is:
Monthly Payment = (Principal * Interest Rate) / (1 - (1 + Interest Rate)^(-Number of Payments))
For the given credit card debt of $7,000 that needs to be paid off in 5 years at a 24.99% interest rate, the calculation would be as follows:
Monthly Payment = (7000 * 0.2499) / (1 - (1 + 0.2499)^(-60))
After evaluating the expression, the monthly payment amount would be approximately $188.56.
To calculate the total interest you will pay to the bank, you can subtract the initial principal amount from the total amount paid over the loan term. For this scenario:
Total Interest = (Monthly Payment * Number of Payments) - Principal
Substituting the values, we get:
Total Interest = (188.56 * 60) - 7000
After evaluating the expression, the total interest you will pay to the bank would be approximately $2713.60.