5) According to a recent WalletHub report, the average credit card balance is $10,848 per American household,at an average 22.75% APR. How long will it take for a credit card balance of $10,848 to be paid off withmonthly $40 minimum payments? How much interest will the credit card debt cost?

Credit card:A credit card is a financial tool that enables individuals to make purchases on credit,…

Answered: 5) According to a recent WalletHub…

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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These are TVM questions Answer the following questions and use the excel finance function to answer the questions. show the excel equation. 1. Payday loans are very short-term loans that charge very high interest rates. You can borrow $500 today and repay $575 in two weeks. What is the compound annual rate implied by this 15 percent rate charged for only two weeks? 2. Payday loans are very short-term loans that charge very high interest rates. You can borrow $200 today and repay $225 in two weeks. What is the compound annual rate implied by this 12.5 percent rate charged for only two weeks? 3. What is the interest rate of a 4-year, annual $1,000 annuity with present value of $3,500? 4. Mr. Jones decides to purchase a car for $10,000. The dealer offers to finance the car at 8% interest over a 4 year period. What is the payment amount that Mr. Jones would be expected to pay? 5. You wish to buy a $20,000 car. The dealer offers you a 5-year loan with a 5…
Today, you borrowed $5,400 on a credit card that charges an interest rate of 14.2 percent, compounded monthly. How long will it take you to pay off this debt assuming that you do not charge anything else and make regular monthly payments of $110?
Suppose your credit card issuer states that it charges a 19.25% nominal annual rate, but you must make monthly payments, which amounts to monthly compounding. What is the effective annual rate? a. 21.04% b. 19.25% c. 20.18% d. 20.68% e. 20.51%
You have just received an offer from a bank for a credit card with a quoted rate, or APR, of 18 percent compounded monthly. What is the EAR, or effective annual rate, on the credit card?
Assume that you start with a balance of $3900 on your credit card. During the first month, you charge $400, and during the second month, you charge $650. Assume that your credit card charges a 27% APR and that each month you make only the minimum payment of 2.5% of the balance. Complete the following table. (Round your answers to the nearest cent.) Previous Balance Finance Charge(+) Purchases(+) Payments(-) New Balance Month 1 3900 Correct. 87.75 Correct. 400 Correct. 97.50Correct. 3890.25 incorrect. Month 2 3890.25 Incorrect. 87.52 Incorrect. 650 Correct. 97.25Incorrect. 3880.27Incorrect.
Saint Paul ne Apote n ts 0. Kyle used the equation y = 300(1.09)* , where x represents months and y represents the amount ne owes, to predict how much he has to pay on his credit card bill if he does not make any payments each month. a. What is Kyle's original credit card bill? b. What is the interest rate on his credit card? С. How much money will Kyle owe if he does not pay off his balance for 6 months? 9. The population of the deer on Walla Walla Island doubles every year. The island began with 8 deer. Write a function that models the change in the animal population: a. b. How many deer will there be after 5 years? How many deer will there be after 10 years? С.
10) Assuming the APR on your credit card is 24 percent and your average daily balance this month was $8,000, what will your interest or finance charges for the month be?
Suppose that on January 1 you have a balance of $3800 on a credit card whose APR is 13%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. b. When the card is paid off, how much will you have paid since January 1? c. What percentage of your total payment from part (b) is interest? a. The monthly payment is $ ☐. (Do not round until the final answer. Then round to the nearest cent as needed.)
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If a credit card has a 30-day billing period, a 20-day grace period, and charges an interest rate of 20%, compounded daily, how much interest will be charged on a $5000 average monthly balance which gets paid 40 days after the statement due date using the average daily balance method?
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5) According to a recent WalletHub report, the average credit card balance is $10,848 per American household at an average 22.75% APR. How long will it take for a credit card balance of $10,848 to be paid off with monthly $40 minimum payments? How much interest will the credit card debt cost?