Question

Ramiro is also a college student. He has a credit card balance of $500.00. The APR on his card is 18.24%. His minimum payment is $10.00. (do not use commas or dollar signs in the answers) If Ramiro stops using his credit card, how long will it take him (in months) to pay off the $500.00 if he makes only the minimum payment?

Answer 1

Answer: It will take approximately 30 months to pay off the $500.00.

Step-by-step explanation:

Since we have given that

Principal = $10.00

Amount = $500.00

Rate of interest = 18.24%

So, we will apply "Compound interest" to find the number of months:

$A=P(1+\dfrac{r}{100})^n\\\\500=10(1+\dfrac{18.24}{100})^n\\\\500=11.824^n\\\\\n\approx 2.5$

So, the number of months would be

$2.5\times 12=30\ months$

Hence, it will take approximately 30 months to pay off the $500.00.