It will take them approximately 3 months to pay off the balance on the credit card
<h3 /><h3>First Month</h3>To solve this problem, we need to find the interest on 3287.90 at 14.5%
for the first month, we would have
Now we divide this by 12 to give the interest payable on the first month
So we have
We would do the same thing for the second month and it will give us
For the second month, we have $25.71 as the interest payable
We can calculate how much would be left after the second month.
In the third month, since the balance remaining is less than the monthly payment schedule, we can assume they'd pay everything off which is 953.34.
From the calculations above, we can see that it'll take them 3 months to pay off the credit card balance.
The balance at the end of each month are;
- $2,127.63
- $953.34
- $0
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