Question

Michelle has four credit cards with the balances and interest rates listed below. She would like to consolidate all of her credit cards in a single credit card with an interest rate of 16% and pay off the balance in 36 months. If she did so, what would Michelle’s monthly credit card payment be? Credit Card Balance APR.

Answer 1

Michelle needs to pay $561.06 on all four credit cards every month to clear her dues in 36 months.

What is a credit card?

A credit card is a small plastic card issued by a bank, building society , or other financial institution that allows the holder to buy products or services on credit.

We have the given information available in this case:

   Credit Card balance     APR

• $4,380 at the rate of 17%
• $1,365 at the rate of 19%
• $2,480 at the rate of 23%
• $5,000 at the rate of 15%

The interest on all the four cards is for 36 months that is 3 years, therefore the interest will be paid for 3 years:

For that we will be using Simple interest rate formula to calculate the interest:

$\rm\,Total\,amount\,on\,Card1 = P+ \dfrac{P\times\,R\times\,T}{100}\\\\= 4,380 + \dfrac{4,380\times\,0.17\times\,3}{100} \\ \\= \ 6,613.8\\\\\rm\,Total\,amount\,on\,Card2 = 1,365 + \dfrac{1,365\times\,0.19\times\,3}{100}\\\\= \ 2,143.05\\\\ \rm\,Total\,amount\,on\,Card\,3 = 2,480 + \dfrac{2,480\times\,0.23\times\,3}{100}\\\\= \,\ 4,191.2\\\\= \rm\,Total\,amount\,on\,Card\,4 = 5,000 + \dfrac{5,000\times\,0.15\times\,3}{100}\\\\= \ 7,250$

The total sum of money that Michelle needs to pay on her credit cards:

$\rm\,Total\,Amount = Total\,amount\,on\,Card\,1 + Total\,amount\,on\,Card\,2+Total\,amount\,on\,Card\,3 + Total\,amount\,on\,Card\,4\\= \ 6,613.8 + \ 2,143.05+\ 4,191.2 + \ 7,250\\\\= \ 20,198.05$

Finally, the amount that Michelle needs to pay on a monthly basis to clear her dues on the credit card: ( Division of the total amount into 36 parts as she has to pay dues in 36 months)

$\rm\,Monthly\,installment = \dfrac{Total\,Amount}{36\,months}\\\\\\\\\dfrac{\rm\,Total\,Amount}{\rm\,36\,months}\\\\=\dfrac{\rm\, \ \,20,198.05}{\rm\,36\,months}\\\\= \ 561.0569$

Thus, the amount that Michelle has to pay every month for 3 years (36 months) to clear her credit card dues is $561.06.

To learn more about credit card, refer to the link:

brainly.com/question/2808739