Question

Helen recently received a credit card with a nominal interest rate of 19 percent. With the card, she purchased some new clothes for $400. The minimum payment on the card is only $20 per month. If Helen makes the minimum monthly payment and makes no other charges, how long will it be before she pays off the card?

Answer 1

Helen will take 20 months to pay off the credit card with the minimum monthly payment of $20.

Step-by-step explanation:

To calculate how long it will take Helen to pay off the credit card, we need to divide the total amount owed by the minimum monthly payment. In this case, Helen owes $400 and the minimum payment is $20. So, it will take her 400/20 = 20 months to pay off the card.

It is important to note that during this time, Helen will be charged interest on the amount she owes. The nominal interest rate of 19 percent means that she will be charged 19% of the amount she owes each year. This will increase the total amount she has to pay back.