Document Wor Design Layout Refercs aigs Review ailings Que stion Help A new empl

Question

Document Wor Design Layout Refercs aigs Review ailings Que stion Help A new employee charged $8870 on his cre dit card to relocate for hisfirstjob.After noticing that the inte rest rate for his balance was 24% compounde d monthly he stoppe d charging on that account. He wishe sto pay off hisbalance in 2yearsusing automatic payments sent at the end of e ach month. Althat monthly payment must he make to pay off the account at the end of 2 years? b. How much total intere st will he have paid? (Round to the neare st cent as neede d.) Chegg Stu Mathemati

Explanation / Answer

a.

Principal amount = $8870

Interest rate = 24%

Monthly interest rate (r) = 24%/12 = 2% = 0.02

No. of monthly repayments (n) = 2 year * 12 = 24

Loan payment = (Loan amount * r) / {1 – (1+r)-n}

Monthly payment = (8870 * 0.02) / (1 – 1.02-24) = $177.4 / 0.378 = $468.97

b.

Total amount paid over 2 years = $468.97 * 24 = $11255.28

Total interest paid = $11255.28 - $8870 = $2385.28

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.