Paying off a Discover card. Assume that you have a balance of $3000 on your Discover credit card and that you make no more charges. Assume that Discover charges 21% APR and that each month you make only the minimum payment of 2% of the balance. a. Find a formula for the remaining balance after t monthly payments. b. On what balance do you begin making payments of $50 or less? c. Find how many months it will take to bring the remaining balance down to the value from part b.
Paying off a Discover card. Assume that you have a balance of $3000 on your Discover credit card and that you make no more charges. Assume that Discover charges 21% APR and that each month you make only the minimum payment of 2% of the balance. a. Find a formula for the remaining balance after t monthly payments. b. On what balance do you begin making payments of $50 or less? c. Find how many months it will take to bring the remaining balance down to the value from part b.
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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![Paying off a Discover card. Assume that you have a balance of $3000 on your Discover credit card and
that you make no more charges. Assume that Discover charges 21% APR and that each month you make
only the minimum payment of 2% of the balance.
a. Find a formula for the remaining balance after t monthly payments.
b. On what balance do you begin making payments of $50 or less?
c. Find how many months it will take to bring the remaining balance down to the value from part b.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F49291a3e-a78a-4786-bafe-efef3935fe0c%2F7cfc716f-8bfe-4f60-b29c-6b5b19542df7%2Fccrv27o_processed.png&w=3840&q=75)
Transcribed Image Text:Paying off a Discover card. Assume that you have a balance of $3000 on your Discover credit card and
that you make no more charges. Assume that Discover charges 21% APR and that each month you make
only the minimum payment of 2% of the balance.
a. Find a formula for the remaining balance after t monthly payments.
b. On what balance do you begin making payments of $50 or less?
c. Find how many months it will take to bring the remaining balance down to the value from part b.
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