Question

Jeff has a balance of $2,513.77 on his credit card. He would like to pay off his card over the course of a year and a half by making identical monthly payments. The APR on his card is 10.66%, compounded monthly. Assuming that Jeff makes no additional purchases with his card, how much will he have to pay every month to reach his goal? (Round all dollar values to the nearest cent.) a. $151.73 b. $162.57 c. $139.65 d. $147.64 Please select the best answer from the choices provided A B C D

Answer 1

Using the monthly payment formula, it is found that the amount he will have to pay is given as follows:

a. $151.73.

What is the monthly payment formula?

It is given by:

$A = P\frac{\frac{r}{12}\left(1 + \frac{r}{12}\right)^n}{\left(1 + \frac{r}{12}\right)^n - 1}$

In which:

• P is the initial amount.

• r is the interest rate.

• n is the number of payments.

In this problem, the parameters are given as follows:

P = 2513.77, r = 0.1066, n = 1.5 x 12 = 18.

Hence:

r/12 = 0.1066/12 = 0.008883.

$A = 2513.77\frac{0.008883(1 + 0.008883)^{18}}{(1 + 0.008883)^{18} - 1} = 151.73$

Hence option A is correct.

More can be learned about monthly payments at https://brainly.com/question/2151013

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