Question

Paul has budgeted to pay $80 each month on his credit card which has a $2,818 balance and has an annual finance rate of 15.9%. How many years will it take him to pay off the card?

Answer 1

Answer:

time = 4 year

Explanation:

given data

pay each month =  $80  

Credit card balance = $2,818

annual finance rate = 15.9%

solution

we get here time period that is express by as

Monthly payment = $\frac{(P \times \frac{r}{12}) \times (1+ \frac{r}{12})^t }{(1+\frac{r}{12})^t-1}$     ............1

put here value and we get

80 =  $\frac{(2818 \times \frac{0.159}{12}) \times (1+ \frac{0.159}{12})^t }{(1+\frac{0.159}{12})^t-1}$    

solve it we get time t

t = 48 month

time = 4 year