Question

Suppose you take out a new credit card with a stated annual percentage rate of 22%.
Your credit card agreement offers you a grace period so that if your entire balance is
paid off each month, you owe no interest. The minimum payment amount is
$50/month if you carry a balance. During the first month of having your new card,
you incur charges of $2400. You decide to stop using your card and pay off the
balance.
a. If you make the minimum monthly payment, how long will it take you to
pay off your debt? How much will it cost you in interest?
b. If you want to pay off the debt in 12 months, what mo

Answer 1

B-Balance
W- Monthly Payment
R- Monthly Interest
N- Term

\[B (1+R)^N+\frac{W\left(1-(1+R)^N\right) }{R}\]