Calvin Johnson has a ​$5,500 debt balance on his Visa card that charges 12.2 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.)

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
icon
Related questions
Question
Calvin Johnson has a
​$5,500
debt balance on his Visa card that charges
12.2
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.)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 4 images

Blurred answer
Knowledge Booster
Avoiding and Correcting Credit Mistakes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education