1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kobusy [5.1K]
2 years ago
8

3. Suppose your credit card has a balance of $7800 and an annual interest rate of 16%. You decide

Mathematics
1 answer:
Blizzard [7]2 years ago
8 0

Answer:

  • $274.22 per month
  • $2071.92 in total interest
  • $433.48 more per month
  • $1379.52 less in interest

Step-by-step explanation:

a) The amortization formula is used to find the monthly payment (A):

  A = P(r/n)/(1 -(1 +r/n)^(-nt))

for a loan of a principal amount P at annual rate r compounded n times per year for t years.

For a borrowed amount of $7800 at 16% compounded monthly for 3 years, the payment will be ...

  A = $7800(.16/12)/(1 -(1 +.16/12)^(-12·3)) ≈ $274.22

You must pay $274.22 each month to pay off the credit card in 3 years.

__

b) The total amount repaid is 36 times this monthly payment, so is ...

  $274.22 × 36 = $9871.92

The amount by which this exceeds the principal borrowed is ...

  $9871.92 -7800 = $2071.92

You will pay $2071.92 in interest.

__

c) Changing the time period to 1 year gives the payment value ...

  A = $7800(.16/12)/(1 -(1 +.16/12)^(-12·1)) ≈ $707.70

The additional amount you must pay is ...

  $707.70 -274.22 = $433.48

You must pay $433.48 more each month.

__

d) Your total interest with the higher payments will be ...

  $707.70×12 -7800 = $692.40

The difference in interest amounts is ...

  $2071.92 -692.40 = $1379.52

You will pay $1379.52 less in total interest.

_____

<em>Caveat</em>

Here, the monthly amounts are rounded and the total repayment amount is based on that rounded value. In an actual payment situation, the final payment will be adjusted by a small amount to account for the fact that the monthly payment shown is not exact. That will affect the total interest and the difference in interest.

You might be interested in
Answer? Please help quickly
lozanna [386]
The answer is A. See the photo below:

6 0
2 years ago
Translate the following written expression into an algebraic expression:
hammer [34]

Answer:

(y-5) ÷ 2

Step-by-step explanation:

8 0
2 years ago
3 over 4 x minus 3 +1 over 4x= 2 1over2 minus 1 over 4
Dima020 [189]

It should be x=5\frac{1}{4}.

8 0
3 years ago
The sum of nine consecutive integers; n=middle integer of the nine
VMariaS [17]
(n-4)+(n-3)+(n-2)+(n-1)+n+(n+1)+(n+2)+(n+3)+(n+4)=9n
4 0
3 years ago
A group of 3 people are sharing chocolates. Each person wants 8 chocolates and each box has 6 chocolates. How many boxes do they
nekit [7.7K]
They would need 4 boxes
8 0
2 years ago
Other questions:
  • Cherri said that 0.9 /3= 0.3 is she correct? explain why or why not
    10·2 answers
  • 500 feet is the same as how many meters
    7·2 answers
  • A circular city park has a garden with a sidewalk directly through the middle that is 45 feet long. Each bag of grass seed will
    5·2 answers
  • You invest 5000 dollars in an account at 1.6% interest is compounded annually (once a year) a) write an equation that shows the
    8·1 answer
  • Select the correct answer from each drop-down menu.
    12·2 answers
  • 1. MULTIPLE CHOICE Suppose y varies directly as x.
    9·1 answer
  • What is the equation for the angle below?
    14·2 answers
  • What is 103 % of 134?
    9·1 answer
  • Can someone help me with this? ^_^<br> 4(-3f-4)-9f4(−3f−4)−9f
    7·1 answer
  • Which of the following measurements contains two significant figures?
    15·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!