e Question 20 of 20 Check My Work (3 remaining) Click here to read the eBook: Fu
ID: 2809171 • Letter: E
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e Question 20 of 20 Check My Work (3 remaining) Click here to read the eBook: Future Values Click here to read the eBook: Semiannual and Other Compounding Periods PAYING OFF CREDIT CARDS Simon recently received a credit card with an 13% nominal interest rate, with the card, he purchased an Apple iPhone 5 for $310. The minimum payment on the card is only $20 per month. a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest month. month(s) b. If Simon makes monthly payments of s60, how many months will t be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest month. month(s) c. How much more in total payments will Simon make under the $20-a-month plan than under the $60-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent. Check My Work (3 remaining)Explanation / Answer
Using the annuity formula:-
PV=(A/r)*(1-(1/(1+r)T))
where PV=Present value=145,000
A= annual cash payments=10,534.09
r=rate of interest
T=time period=30
Solving the above equation, gives the value of rate of interest as 6%
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