1. Paul recently purchased a new flat screen TV for his first apartment on his Best Buy credit card. Its annual interest rate is 29.90% compounded monthly.

(a) How many payments will it take him to pay off a $1,000 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 19.5% 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?