Assume you have a balance of $1200 on a credit card with an APR of 24%, or 2% pe

Question

Assume you have a balance of $1200 on a credit card with an APR of 24%, or 2% per month. You start making monthly payments of $200, but at the same time you charge an additional $70 per month to the credit card. Assume that interest for a given month is based on the balance for the previous month. The following table shows how you can calculate your monthly balance. Complete and extend the table to show the balance at the end of each month until the debt is paid off. How long does it take to pay off the credit card debt? Fill out the table row by row. and continue until the last full payment. (Round to the nearest cent as needed.)

Explanation / Answer

Month Payment Expenses Interest New Balance 0 - - - $1200 1 $200 $70 $1200 * 0.02 = $24 1200-200+70+24 = $1094 2 200 70 1094 * 0.02 = 21.88 1094-200+70+21.88 = 985.88 3 200 70 985.88 * 0.02 = 19.72 985.88 - 200 + 70 +19.72 = 875.58 4 200 70 875.58 * 0.02 = 17.51 875.58 - 200+70+17.51 = $763.09 5 200 $70 763.09*0.02 = 15.26 763.09-200+70+15.26 = $648.35 6 200 $70 648.35*0.02 = 12.97 648.35-200+70+12.97 = $531.32 7 200 $70 531.32*0.02 = 10.63 531.32-200+70+10.63 = $411.95 8 200 $70 411.95*0.02 = 8.24 411.95-200+70+8.24 = $290.19 9 200 $70 290.19*0.02 = 5.80 290.19-200+70+5.80 = $166 10 200 $70 166*0.02 = 3.32 166-200+70+3.32 = $39.32 11 110.11 $70 39.32*0.02 = 0.79 39.32-110.11+70+0.79 = $0

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