Suppose that on January 1 you have a balance of $4,500 on a credit card whose APR is 16%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. A) Calculate your monthly payments. B) When the card is paid off, how much will you have paid since January 1? C) What percentage of your total payment from part B) is interest?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 36P
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Suppose that on January 1 you have a balance of $4,500 on a
credit card whose APR is 16%, which you want to pay off in 1
year. Assume that you make no additional charges to the card
after January 1.
A) Calculate your monthly payments.
B) When the card is paid off, how much will you have paid since
January 1?
C) What percentage of your total payment from part B) is
interest?
Transcribed Image Text:Suppose that on January 1 you have a balance of $4,500 on a credit card whose APR is 16%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. A) Calculate your monthly payments. B) When the card is paid off, how much will you have paid since January 1? C) What percentage of your total payment from part B) is interest?
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