Amira and Owen pay, on average, $800 towards their credit cards every month, and generally carry a balance of $2,000 from month to month. Combined, their total credit card limit is $10,000.

The couples credit card charges an annual percentage rate (APR) of 18%, compounded daily, and requires a 5% minimum payment.

1. How long would it take them to pay off their $2,000 balance if they shelve their cards, never use them again, and continue with the ($2,000 x 0.05) = $100 minimum monthly payment required now?

2. How much total interest would they have paid?

Calculation of credit card amortization period

Calculation of total interest paid