Question

james has $3000 in credit card debt, which charges 14% interest. how long will it take to pay off the card if he makes the minimum payment of $60.00 a month?

Answer 1

Answer:

The answer is approx 75 months.

Step-by-step explanation:

We have P = 3000

r = 14%

Monthly payment = $60

We will use the formula :

$[(0.14/12) \times3000] / [1- (1+(0.14/12)^{-12n}]$

Solving this we get n = approx 75 months. After 75 months few dollars will be left. And in the 76th month the balance will become negative.

For easy and better understanding, I have attached an excel sheet.

The answer is approx 75 months.

Download xlsx