**Credit Card Debt Payment Calculation**You have an outstanding credit card balance of $3,000. You decide to stop making new charges and pay $450 each month until the balance is paid. If your annual interest rate is 18%, how many months will it take you to pay off your balance?---To solve this problem, you need to consider both the monthly payment and the impact of the interest rate on the remaining balance each month. 1. **Understand the Interest Rate:** - The annual interest rate is 18%, which means the monthly interest rate is 1.5% (since 18% / 12 months = 1.5%).2. **Calculate the Monthly Payment Process:** - Each month, interest is added to the outstanding balance before the payment is deducted.3. **Determine the Number of Payments:** - To find out how many months it will take to pay off the outstanding balance, a systematic approach or a formula can be applied considering the given conditions and interest rate.Understanding this process involves mathematical calculations often applied in financial contexts, such as using the formula for amortizing loans or credit card debt. Detailed calculations can be solved using algebra or financial tools.

The entire amount of charges and transactions that a person has made on their credit card but hasn't…

You have an outstanding credit card balance of $3,000. You decide to stop making new charges and pay $450 each month until the balance is paid. If your annual interest rate is 18%, how many months will it take you to pay off your balance?

You have an outstanding credit card balance of $3,000. You decide to stop making new charges and pay $450 each month until the balance is paid. If your annual interest rate is 18%, how many months will it take you to pay off your balance?

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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Question

**Credit Card Debt Payment Calculation**

You have an outstanding credit card balance of $3,000. You decide to stop making new charges and pay $450 each month until the balance is paid. If your annual interest rate is 18%, how many months will it take you to pay off your balance?

---

To solve this problem, you need to consider both the monthly payment and the impact of the interest rate on the remaining balance each month.

1. **Understand the Interest Rate:**
- The annual interest rate is 18%, which means the monthly interest rate is 1.5% (since 18% / 12 months = 1.5%).

2. **Calculate the Monthly Payment Process:**
- Each month, interest is added to the outstanding balance before the payment is deducted.

3. **Determine the Number of Payments:**
- To find out how many months it will take to pay off the outstanding balance, a systematic approach or a formula can be applied considering the given conditions and interest rate.

Understanding this process involves mathematical calculations often applied in financial contexts, such as using the formula for amortizing loans or credit card debt. Detailed calculations can be solved using algebra or financial tools.

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