Paul recently purchased a new flat screen TV for his first apartment on his Sears credit card. Its annual interest rate is 29.90% compounded monthly.
a. How many payments will it take him to pay off a $1000 balance if he makes monthly payments of $200? How much interest will he pay overall?
b. If he paid for the purchase with a CIBC credit card that charged 19.50% compounded monthly, and kept the payments at $200, how many payments would he have to make? How much interest would he pay with this credit card and how much interest would he save?