Use PMT= to determine the regular payment amount, rounded to the nearest dollar. Your cre has a balance of $4800 and an annual interest rate of 19%. With no further purchases charged to the card an balance being paid off over five years, the monthly payment is $125, and the total interest paid is $2700. You a bank loan at 11.5% with a term of six years. Complete parts (a) and (b) below. a. How much will you pay each month? How does this compare with the credit-card payment each month? Se correct choice below and fill in the answer boxes to complete your choice. (Do not round until the final answer. Then round to the nearest dollar as needed.) OA. The monthly payments for the bank loan are approximately $ monthly credit-card payments. OB. The monthly payments for the bank loan are approximately $ This is more than the This is $ less than the
Use PMT= to determine the regular payment amount, rounded to the nearest dollar. Your cre has a balance of $4800 and an annual interest rate of 19%. With no further purchases charged to the card an balance being paid off over five years, the monthly payment is $125, and the total interest paid is $2700. You a bank loan at 11.5% with a term of six years. Complete parts (a) and (b) below. a. How much will you pay each month? How does this compare with the credit-card payment each month? Se correct choice below and fill in the answer boxes to complete your choice. (Do not round until the final answer. Then round to the nearest dollar as needed.) OA. The monthly payments for the bank loan are approximately $ monthly credit-card payments. OB. The monthly payments for the bank loan are approximately $ This is more than the This is $ less than the
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
Related questions
Question
![Use the formula:
\[ \text{PMT} = \frac{P \left( \frac{r}{n} \right)}{1 - \left(1 + \frac{r}{n}\right)^{-nt}} \]
to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a balance of $4800 and an annual interest rate of 19%. With no further purchases charged to the card and the balance being paid off over five years, the monthly payment is $125, and the total interest paid is $2700. You can get a bank loan at 11.5% with a term of six years. Complete parts (a) and (b) below.
---
a. How much will you pay each month? How does this compare with the credit-card payment each month? Select the correct choice below and fill in the answer boxes to complete your choice.
(Do not round until the final answer. Then round to the nearest dollar as needed.)
- A. The monthly payments for the bank loan are approximately \$\_\_. This is \$\_\_ more than the monthly credit-card payments.
- B. The monthly payments for the bank loan are approximately \$\_\_. This is \$\_\_ less than the monthly credit-card payments.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1dcb123b-294f-4e69-8c13-99ba0a677569%2F3b3020e3-bad7-4c03-9d3e-458f330e47a5%2Fni8q3y_processed.png&w=3840&q=75)
Transcribed Image Text:Use the formula:
\[ \text{PMT} = \frac{P \left( \frac{r}{n} \right)}{1 - \left(1 + \frac{r}{n}\right)^{-nt}} \]
to determine the regular payment amount, rounded to the nearest dollar. Your credit card has a balance of $4800 and an annual interest rate of 19%. With no further purchases charged to the card and the balance being paid off over five years, the monthly payment is $125, and the total interest paid is $2700. You can get a bank loan at 11.5% with a term of six years. Complete parts (a) and (b) below.
---
a. How much will you pay each month? How does this compare with the credit-card payment each month? Select the correct choice below and fill in the answer boxes to complete your choice.
(Do not round until the final answer. Then round to the nearest dollar as needed.)
- A. The monthly payments for the bank loan are approximately \$\_\_. This is \$\_\_ more than the monthly credit-card payments.
- B. The monthly payments for the bank loan are approximately \$\_\_. This is \$\_\_ less than the monthly credit-card payments.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
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…
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