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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,
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.
- 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?
- How much total interest would they have paid?
Calculation of credit card amortization period
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Calculation of total interest paid
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