Question

The annual interest rate on a credit card is ​11.99%. If the minimum payment of ​$10 is made each​ month, how many months will it take to pay off an unpaid balance of ​$971.38​? Assume that no new purchases are made with the credit card.

Answer 1

To pay off an unpaid balance of $971.38 with a 11.99% interest rate and minimum payment of $10, it will take approximately 106 months.

Step-by-step explanation:

To pay off an unpaid balance of $971.38 with a credit card annual interest rate of 11.99% and a minimum payment of $10, we can use the formula:

P = A * (1+r/12)^n

Where:

P is the unpaid balance

A is the minimum payment

r is the annual interest rate

n is the number of months

Plugging in the given values, we get:

$971.38 = $10 * (1+11.99%/12)^n

Simplifying the equation gives:

97.138 = 1.008325^n

To solve for n, we can take the logarithm of both sides:

n = log(97.138) / log(1.008325)

Calculating this, we find that it will take approximately 106 months to pay off the unpaid balance.