Calvin Johnson has a $ 5,000 debt balance on his Visa card that charges 15.7 percent APR compounded monthly. In 2009, Calvin's minimum monthly payment is 3 percent of his debt balance, which is $ 150. How many months (round up) will it take Calvin Johnson to pay off his credit card if he pays the current minimum payment of $150 at the end of each month? In 2010, as the result of a federal mandate, the minimum monthly payment on credit cards rose to 4 percent. If Calvin made monthly payments of $ 200 at the end of each month, how long would it take to pay off his credit card? Question content area bottom Part 1 a. If Calvin made monthly payments of $ 150 at the end of each month, how long would it take to pay off his credit card? enter your response here months (Round up to the nearest unit.) Part 2 b. If Calvin made monthly payments of $ 200 at the end of each month, how long would it take to pay off his credit card? enter your response here months (Round up to the nearest unit.)
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Question content area top
Part 1
(
5,000 debt balance on his Visa card that charges
15.7 percent APR compounded monthly. In 2009, Calvin's minimum monthly payment is
3 percent of his debt balance, which is $
150. How many months (round up) will it take Calvin Johnson to pay off his credit card if he pays the current minimum payment of
$150 at the end of each month? In 2010, as the result of a federal mandate, the minimum monthly payment on credit cards rose to
4 percent. If Calvin made monthly payments of $
200 at the end of each month, how long would it take to pay off his credit card?
Question content area bottom
Part 1
a. If Calvin made monthly payments of $
150 at the end of each month, how long would it take to pay off his credit card?
enter your response here
months (Round up to the nearest unit.)
Part 2
b. If Calvin made monthly payments of $
200 at the end of each month, how long would it take to pay off his credit card?
enter your response here
months (Round up to the nearest unit.)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
