Your credit card has a balance of $6100 and an annual terest rate of 4% You deci

Question

Your credit card has a balance of $6100 and an annual terest rate of 4% You decide to pay off the balance over two years. If there are no further purchases charged to the card, you must pay $292 81 each than two. How much more must you pay each month and how much less will you pay in total interest? month, and you will pay a total interest of $927.44. Assume you decide to pay off the balance over one year rather Use PMT -nt to determine the regular payment amount 1-1+ You will pay more each month Round to the nearest cent as needed.) You will pay less in total interest Round to the nearest cent as needed.)

Explanation / Answer

PMT = P (r/n) / 1 - ( 1 + r/n) ^-nt

r =.14

n = 12

P = 6100

plugging the values we get

PMT = 6100 ( .14/12 ) / 1- (1+ .14/12 )^-12

= 71.167 / .12993

= 547.73

so you will pay $ 254.9 more each month and you will pay $ 454.7 less interest

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