Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. You have a credit card with an APR of 22%. The card requires a minimum monthly payment of 14% of the balance. You have

4. You have a credit card with an APR of 22%. The card requires a minimum monthly payment of 14% of the balance. You have a balance of $7,400. You stop charging and make only minimum monthly payments.

(a)Find a formula for the balance, B, after t monthly payments. Simplify the decay factor to 4 decimal places. (1.5 pt)

(b)According to the formula you just created, what percentage of the credit cards balance is paid off each month? Give your answer as a percentage rounded to two decimal places. Write your result in a complete sentence. (1.5 pt)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance Principles And Practice

Authors: Denzil Watson, Antony Head

5th Edition

0273725343, 978-0273725343

More Books

Students also viewed these Finance questions