Question

Lisa has a credit card that charges 5% interest on a monthly balance. She buys a $120 bike and plans to pay for it by making monthly payments of $60. How many months will it take her to pay it off? Assume

Answer 1

Answer:

3 months

Step-by-step explanation:

Without the 5% interest it would take 2 months to pay it off but with the 5% interest added that's going to 5% of whatever the balance is.

After her 1rst payment of 60$ she will have 66$ left to pay: 120(1/20)+6-60

After her 2nd payment of 60$ she will have 9.3$ left to pay: 66(1/20)+ 3.3-60

so basically 2 payments of $60 and one payment of $0.47