Question

You owe $1,000 on a credit card that has an interest rate of 27.99% and make only the minimum payment of $20 each month. Which answer is correct?
A. You will have the card paid off within a year.
B. You will never have the credit card paid off.
C. You will have it paid off within 5 years.
D. You will have the credit card paid off within 10 years.

Answer 1

Answer: The credit card will paid off within 10 years, therefore the correct option is D.

Explanation:

Let the number of years in which the credit card will aid of be x.

It is given that amount owed on credit card is $1000 with interest rate 27.99%.

So the amount of interest is calculated as,

$1000\times \frac{27.99}{100} =\ 27.9$

The total amount have to pay is,

$\ 1000+\ 279.9=\ 1279.9$

The minimum payment is $20 each month.

$x=\frac{1279.9}{20}$

$x=63.995$

So, the credit card will paid of in 63.995 months. We know that 1 year =12 months.

$\frac{63.995}{12} =5.33$

Therefore, the will paid of in 5.33 years, s we can say that the credit card will paid off within 10 years, therefore the correct option is D.

Answer 2

Thank you for posting your question here at brainly. Based on the problem above, the statement that is correct is the letter C which is You will have it paid off within 5 years. Below is the solution:

= ($1000 x 27.99%) + $1000
= ($1000 x .2799) + $1000
=  279.90+ $1000
= $1279.90/ $20
= 63.99/ 12 months 
= 5.33 years