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Mary’s credit card company charges 16% interest on her outstanding credit card balance each month. Her minimum payment is $20 each month. Mary’s credit card bill is $70 in January. Mary only pays the minimum amount each month, and she does not spend any additional money on her credit card. How long, in months, will it take her to pay off her bill from January?

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Answer:

Explanation:

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User Colin Zhong
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It will take Mary 4 months to pay off her credit card bill from January by only paying the minimum amount and not making any additional charges.

Here's how to calculate how long it will take Mary to pay off her credit card bill:

1. **Calculate the monthly interest**: Multiply Mary's outstanding balance by the interest rate:

Monthly interest = Balance * Interest rate = $70 * 16% = $11.20

2. **Calculate the amount paid towards the principal**: Subtract the minimum payment from the balance:

Payment towards principal = Balance - Minimum payment = $70 - $20 = $50

3. **Calculate the new balance for the next month**: Add the monthly interest to the remaining balance:

New balance = Remaining balance + Monthly interest = $50 + $11.20 = $61.20

4. **Repeat steps 2 and 3 until the balance reaches zero**:

* Month 2: Remaining balance = $61.20, Payment towards principal = $40.80, New balance = $20.40

* Month 3: Remaining balance = $20.40, Payment towards principal = $19.20, New balance = $1.20

* Month 4: Remaining balance = $1.20, Payment towards principal = $1.20, New balance = $0

Therefore, it will take Mary 4 months to pay off her credit card bill from January by only paying the minimum amount and not making any additional charges.

Remember, this only considers the minimum payment and doesn't include any additional charges. If Mary continues to make only minimum payments and adds new charges to her card, it will take her much longer to pay off the debt and she will also pay significantly more in interest.

User DIDoS
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