Question

Jenny has a balance of $10,000 on her credit card with an annual interest rate of 15%. To pay off the $10,000 in three years, Jenny will have to make a minimum payment of $346.65 per month. Jack has a balance of $10,000 on his credit card with an annual interest rate of 15%. To pay off the $10,000 in five years, Jack will have to make a minimum payment of $237.90 per month. Who will pay more during the length of their loan and by how much? A) Jack will pay $1,794.60 more. B) Jack will pay $1,305.00 more. C) Jenny will pay $1,794.60 more. Eliminate D) Jenny will pay $1,305.00 more.

Answer 1

Answer:

A) Jack will pay $1,794.60 more.

Step-by-step explanation:

For Jenny :

Balance = $10000

r = 15%

EMI = $346.65

For Jack :

Balance = $10000

r = 15%

EMI = $237.90

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You can find the excel sheet attached with all the working.

Difference = $14274-12479.40$ = $1794.60

This means Jack will pay $1794.60 extra.

So, correct option is A) Jack will pay $1,794.60 more.

Download xlsx

Answer 2

Jack will pay $1,794.60 more