Anne has great difficulty managing her debt. She usually carries a balance on her credit card, has maxed out her $15,000 line of credit and now finds herself in the position of having to borrow to purchase a car.

Part a

Assume Annes credit card balance is $2,000. If she doesnt use the card again and only makes the minimum 3% payment every month, how long would it take her to pay off the balance on her card? The interest rate is 21%, compounded daily.

Part b

Annes line of credit charges an APR of 7%, compounded monthly. She was charged a $200 service fee to set it up. What is the effective annual cost of her line of credit, assuming full draw down?

Please state formulas! Thank you