Question
Today, you borrowed $5,400 on a credit card that charges an interest rate of 12.5 percent, compounded monthly. How long will it take you to
Today, you borrowed $5,400 on a credit card that charges an interest rate of 12.5 percent, compounded monthly. How long will it take you to pay off this debt assuming that you do not charge anything else and make regular monthly payments of $130?
You are considering two savings options. Both options offer a rate of return of 6.2 percent. The first option is to save $1,500, $1,500, and $2,000 at the end of each year for the next three years, respectively. The other option is to save one lump sum amount today. You want to have the same balance in your savings account at the end of the three years, regardless of the savings method you select. If you select the lump sum method, how much do you need to save today?
(Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) It is highly recommended to use Excel (or Google Sheets) or a financial calculator to solve this problem.
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