One of your customers is delinquent on his accounts payable balance. You’ve mutu

Question

One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $750 per month. You will charge 1.80 percent per month interest on the overdue balance.

If the current balance is $17,000, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

One of your customers is delinquent on his accounts payable balance. You’ve mutually agreed to a repayment schedule of $750 per month. You will charge 1.80 percent per month interest on the overdue balance.

If the current balance is $17,000, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16))

Explanation / Answer

Solution :- Let the time taken for the accounts to be paid off will be denoted by T.

1 / (1 + 0.018)T = 1 - [ { (17000 / 750) } * 0.018 ]

1 / (1.018)T = 1 - (22.6667 * 0.018)

1 / (1.018)T = 1 - 0.408 (approx)

1 / (1.018)T = 0.592

(1.018)T = 1 / (0.592)

(1.018)T = 1.6892

T = In 1.6892 / In 1.018

T = 0.524255 / 0.0178399

T = 29.39 Months (approx).

Conclusion :- Time taken for the account to be paid off will be 29.39 Months.

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