Question

Joey realizes that he has charged too much on his credit card and has racked up $4,000 in debt. If he can pay $125 each month and the card charges 18 percent APR (compounded monthly), how long will it take him to pay off the debt

Answer 1

Answer:

it take him 43.92 months to pay off the debt

Explanation:

Use financial calculator to find the number of months to pay off the debt

PV = -4000 is the value of credit card debt in present value

FV = 0 as loan is zero at the end of the period

PMT = 125 per month payment

1 / Y = 18% /12 = 1.5% per month interest rate

Click CPT

Click N = 43.92 months