Calvin Johnson has a ​$4,500 debt balance on his Visa card that charges 13.3 percent APR compounded monthly. In​ 2009, Calvin's minimum monthly payment is 3 percent of his debt​ balance, which is ​$135. How many months​ (round up) will it take Calvin Johnson to pay off his credit card if he pays the current minimum payment of $135 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 ​$180 at the end of each​ month, how long would it take to pay off his credit​ card?

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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Calvin Johnson has a
​$4,500
debt balance on his Visa card that charges
13.3
percent APR compounded monthly. In​ 2009, Calvin's minimum monthly payment is
3
percent of his debt​ balance, which is
​$135.
How many months​ (round up) will it take Calvin Johnson to pay off his credit card if he pays the current minimum payment of
$135
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
​$180
at the end of each​ month, how long would it take to pay off his credit​ card?
 
 
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