Suppose Olivia has $7,020 in credit card debt on the B credit card which has annual interest rate of 18.1%. Olivia is considering transferring her debt to the LA credit card that offers 0% interest for 18 months. (a) If Olivia makes a payment of $390 per month on the VB credit card, what will her balance be at the end of 18 months? Assume that no additional charges are made to the card. (Suggestion: You are trying to find the future value of a debt that has a present value of $7,020. Use the formula for the future value of an ordinary annuity. Round your answer to the nearest cent.) (b) If Olivia makes a payment of $390 per month on the LA credit card, what will her balance be at the end of 18 months? Assume that no additional charges are made to the card. (Suggestion: None of the payment goes to interest on the debt. Round your answer to the nearest cent.) (c) How much lower is the balance due after 18 months on the LA credit card? Note: Some credit card companies may charge a transfer fee which will affect the benefit of a 0% introductory rate. Assume that there is not a transfer fee. (Round your answer to the nearest cent
Suppose Olivia has $7,020 in credit card debt on the B credit card which has annual interest rate of 18.1%. Olivia is considering transferring her debt to the LA credit card that offers 0% interest for 18 months. (a) If Olivia makes a payment of $390 per month on the VB credit card, what will her balance be at the end of 18 months? Assume that no additional charges are made to the card. (Suggestion: You are trying to find the future value of a debt that has a present value of $7,020. Use the formula for the future value of an ordinary annuity. Round your answer to the nearest cent.) (b) If Olivia makes a payment of $390 per month on the LA credit card, what will her balance be at the end of 18 months? Assume that no additional charges are made to the card. (Suggestion: None of the payment goes to interest on the debt. Round your answer to the nearest cent.) (c) How much lower is the balance due after 18 months on the LA credit card? Note: Some credit card companies may charge a transfer fee which will affect the benefit of a 0% introductory rate. Assume that there is not a transfer fee. (Round your answer to the nearest cent
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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Suppose Olivia has $7,020 in credit card debt on the B credit card which has annual interest rate of 18.1%. Olivia is considering transferring her debt to the LA credit card that offers 0% interest for 18 months.
(a) If Olivia makes a payment of $390 per month on the VB credit card, what will her balance be at the end of 18 months? Assume that no additional charges are made to the card. (Suggestion: You are trying to find the future value of a debt that has a present value of $7,020. Use the formula for the future value of an ordinary annuity. Round your answer to the nearest cent.)
(b) If Olivia makes a payment of $390 per month on the LA credit card, what will her balance be at the end of 18 months? Assume that no additional charges are made to the card. (Suggestion:
None of the payment goes to interest on the debt. Round your answer to the nearest cent.)
(c) How much lower is the balance due after 18 months on the LA credit card? Note: Some credit card companies may charge a transfer fee which will affect the benefit of a 0% introductory rate. Assume that there is not a transfer fee. (Round your answer to the nearest cent.)
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