You have a credit card with a current balance of $150. The interest rate is 13.99% and you use this card to pay your cell phone bill of $89 each month. That is now the only time you use this card.

Reminders:

The finance charge is found by dividing the interest rate by 12 and then multiplying by the carry-over balance. This formula is entered for you!

Excel is a calculator, and you can perform any mathematical calculation by first starting with an equal sign (=).

You can autofill columns by dragging on the little green square in the bottom right corner of a cell.

Use Excel to answer the following questions:

If your minimum payment is 15% of your new balance, what is the balance of your card month 13 (line 14 in Excel)?

If your minimum payment is $75, what is the balance of your card for month 13 (line 14 in Excel)?

If your minimum payment is 50% of your new balance, what is the balance of your card month 13 (line 14 in Excel)?

Use guess and check: What DOLLAR amount would allow you to pay off the total balance in month 13 (line 14 of Excel)? (Your last payment, in line 12, maybe less than the payment of all other months.)

What do you think is a better idea:

Paying a percentage of your monthly balance or

Paying a fixed amount each month Why?