Excel to solve
Credit Card Debt Scenario A department store offers you the following credit card offer: No money down and no interest for 5 years. You have been considering a new furniture purchase for your home and decide to sign up for this attractive offer as you purchase $10,000 worth of furniture. Since personal funds are low, you decide to utilize the no payment, no interest option for 5 years, and plan to begin payments when the five year offer ends. You also decide not to make any more charges on this credit card So... in this assignment, we pick up at the end of the 5-year period, with a $10,000 debt on a credit card. The interest rate-17% APR of your outstanding balance. Each month, your minimum monthly payment 2% of outstanding debt. When the outstanding balance The bill arrives and you make the 2% minimum payment. > Next month's bill $9800 +interest on the outstanding balance 2 $ $ 10,000.00 $ 138.83 9,938.83 $ 9,800.00 9,740.06 9,680.48 $ 200.00 198.78 197.56 196.35 137.98 9,878.04 $ 137.14 9,817.62 When you are finished with the table, answer the following questions How many years did it take to pay off this debt? How much did you actually pay for this furniture? How much interest did you pay? There are times when everyone needs to borrow money. Assuming that the loan was necessary, identify at least 2 strategies that would have helped lower the total amount paid for this furniture Suppose you HAD decided to add more charges to the credit card before or even while trying to pay off this furniture purchase? Copy the first few lines of your existing work onto a second worksheet and experiment by adding what you think is a typical monthly expenditure (and it does not have to be the same amount each month). What observations can be made? 1. 2. 3. 4. 5. Plus Interest Applied to the Amount of You Make a Remaining Plus this Month's Credit Card Charges Minimum Monthly End of (Outstanding) Outstanding Month # Balance Billed Amount For Payment of 2% of This Month $10,000.00 Balance the Billed Amount You charged this amount on a credit card. -> The bill arrives and you make the 2% minimum payment. Next month's bill- $9800+interest on the outstanding balance.2 $9,800.00 $ 10,000.00 400.00 10,338.83 400.00 10,675.59 $ 200.00 206.78 213.51 138.83 3 S 10,132.06$ 143.54
