You have credit card debt of $2420 on your card. You receive an offer to transfer this debt to a new card with an introductory APR of 8% for the first 6 months. After that, the rate becomes 28%. You take the offer and pay nothing toward your principal and don't charge any further debts, but you pay all of the interest every month. Assume that not paying any principal is okay with the terms of the card. Also assume that there are 30 days in a month using the monthly interest formula 1 = Principal * APR as a decimal 30/365, which is appropriate since the amount owed does not change from month to month if the entire intetest is paid in full. What is the monthly interest payment on $2420 during the first six months per month? Round to the nearest cent. What is the interest payment on $2420 in month number 7 and for all the following months if no more charges are made but no principal is paid, either? Round 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
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You have credit card debt of $2420 on your card. You receive an offer to transfer this debt to a new card
with an introductory APR of 8% for the first 6 months. After that, the rate becomes 28%.
You take the offer and pay nothing toward your principal and don't charge any further debts, but you pay
all of the interest every month. Assume that not paying any principal is okay with the terms of the card.
Also assume that there are 30 days in a month using the monthly interest formula 1 = Principal * APR as a
decimal * 30/365, which is appropriate since the amount owed does not change from month to month if the
entire interest is paid in full.
What is the monthly interest payment on $2420 during the first six months per month?
$
Round to the nearest cent.
What is the interest payment on $2420 in month number 7 and for all the following months if no more
charges are made but no principal is paid, either?
$
Round to the nearest cent.
Transcribed Image Text:You have credit card debt of $2420 on your card. You receive an offer to transfer this debt to a new card with an introductory APR of 8% for the first 6 months. After that, the rate becomes 28%. You take the offer and pay nothing toward your principal and don't charge any further debts, but you pay all of the interest every month. Assume that not paying any principal is okay with the terms of the card. Also assume that there are 30 days in a month using the monthly interest formula 1 = Principal * APR as a decimal * 30/365, which is appropriate since the amount owed does not change from month to month if the entire interest is paid in full. What is the monthly interest payment on $2420 during the first six months per month? $ Round to the nearest cent. What is the interest payment on $2420 in month number 7 and for all the following months if no more charges are made but no principal is paid, either? $ Round to the nearest cent.
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