Calvin Johnson has a ​$   5,500 debt balance on his Visa card that charges   14.6 percent APR compounded monthly.  In​ 2009, Calvin's minimum monthly payment is   4 percent of his debt​ balance, which is ​$   220.  How many months​ (round up) will it take Calvin Johnson to pay off his credit card if he pays the current minimum payment of   $220 at the end of each​ month?  In​ 2010, as the result of a federal​ mandate, the minimum monthly payment on credit cards rose to   5 percent.  If Calvin made monthly payments of ​$   275 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 ​$   220 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 ​$   275 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.)

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
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Part 1

​(Annuity payments) Calvin Johnson has a ​$

 

5,500 debt balance on his Visa card that charges

 

14.6 percent APR compounded monthly.  In​ 2009, Calvin's minimum monthly payment is

 

4 percent of his debt​ balance, which is ​$

 

220.  How many months​ (round up) will it take Calvin Johnson to pay off his credit card if he pays the current minimum payment of

 

$220 at the end of each​ month?  In​ 2010, as the result of a federal​ mandate, the minimum monthly payment on credit cards rose to

 

5 percent.  If Calvin made monthly payments of ​$

 

275 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 ​$

 

220 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 ​$

 

275 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.)

 

 

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