2. On another credit card you have a balance of $3000.00 with an interest rate of 1% per month on the unpaid balance. The minimum payment each month is the interest for the month PLUS 2% of the unpaid balance. So every month if you make the minimum payment you cover the 1% interest and the principal balance decreases by 2%. You decide to make no further purchases on this credit card and make the minimum payment each month for four months. How much will you have paid down the principal balance at the end of four months?

2. On another credit card you have a balance of $3000.00 with an interest rate of 1% per month on the unpaid balance. The minimum payment each month is the interest for the month PLUS 2% of the unpaid balance. So every month if you make the minimum payment you cover the 1% interest and the principal balance decreases by 2%. You decide to make no further purchases on this credit card and make the minimum payment each month for four months. How much will you have paid down the principal balance at the end of four months?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The annual interest rate on a credit card is 14.99 %. If a payment of $200 .00 is made each month, how many months will it take to pay off an unpaid balance of $2,513.11 ? Assume that no new purchases are made with the credit card
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