8. I am an average American, which means my wife and I and our 2.2 children have about $42,000 in debt (Recall, debt, mortgages, and loans are all paid off according to the same formula). This debt is to be paid off with monthly payments to my (8) credit card company(ies) at the standard annual interest rate of 14.8%. a. How much do I have to pay each month if I want to pay off the debt in five years? b. What would be the total amount of all the monthly payments required to pay the debt off, and how much of these payments is actually just interest? c. Suppose instead that I can afford to pay $750 per month. How long will it take me to pay it off now?
8. I am an average American, which means my wife and I and our 2.2 children have about $42,000 in debt (Recall, debt, mortgages, and loans are all paid off according to the same formula). This debt is to be paid off with monthly payments to my (8) credit card company(ies) at the standard annual interest rate of 14.8%. a. How much do I have to pay each month if I want to pay off the debt in five years? b. What would be the total amount of all the monthly payments required to pay the debt off, and how much of these payments is actually just interest? c. Suppose instead that I can afford to pay $750 per month. How long will it take me to pay it off now?
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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Transcribed Image Text:8. I am an average American, which means my wife and I and our 2.2 children have
about $42,000 in debt (Recall, debt, mortgages, and loans are all paid off according
to the same formula). This debt is to be paid off with monthly payments to my (8)
credit card company(ies) at the standard annual interest rate of 14.8%.
a. How much do I have to pay each month if I want to pay off the debt in five years?
b. What would be the total amount of all the monthly payments required to pay the
debt off, and how much of these payments is actually just interest?
c. Suppose instead that I can afford to pay $750 per month. How long will it take
me to pay it off now?
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