Simon recently received a credit card with an 18% nominalinterest rate. With the card, he purchased an Apple iPhone 7 for $372.71. The minimumpayment on the card is only $10 per month. a. If Simon makes the minimum monthly payment and makes no other charges, howmany months will it be before he pays off the card? Round to the nearest month.b. If Simon makes monthly payments of $35, how many months will it be before he paysoff the debt? Round to the nearest month.c. How much more in total payments will Simon make under the $10-a-month plan thanunder the $35-a-month plan? Make sure you use three decimal places for N.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
Simon recently received a credit card with an 18% nominal
interest rate. With the card, he purchased an Apple iPhone 7 for $372.71. The minimum
payment on the card is only $10 per month.
a. If Simon makes the minimum monthly payment and makes no other charges, how
many months will it be before he pays off the card? Round to the nearest month.
b. If Simon makes monthly payments of $35, how many months will it be before he pays
off the debt? Round to the nearest month.
c. How much more in total payments will Simon make under the $10-a-month plan than
under the $35-a-month plan? Make sure you use three decimal places for N.
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