Question

You decide to use your department store charge card .. a lot! After seven weeks you have racked up $1,400 of debt. Your minimum monthly payment is $45, and is paid at the end of each month. If the APR is 16.80%, how long will it take you to pay the loan off? (Assume that you make the minimum payment until the debt is entirely paid off.)

Answer 1

41 months

Step-by-step explanation:

For computing the time period we have to use the NPER formula i.e shown in the attachment

Given that,

Present value = $0

Future value = $1,400

Rate of interest = 16.80% ÷ 12 months = 1.4%

PMT = $45

The formula is shown below:

= NPER(Rate;PMT;PV;-FV;type)

The future value come in negative

So, after applying the above formula, the time period is 41 months