Question

An unpaid debt with compounding interest grows in time. Suppose your debt starts out at $3500 and that in the next five years, the debt can grow with interest. Your goal is to pay off the accumulated debt in five years. To compute your monthly payment during the five years, use the formula shown. In the formula, M is the monthly payment, P is the principal (initial amount of the loan), n is the number of periods (in this case 60 months), and r is the interest rate per period (which is APR divided by 12 expressed as a decimal). If the credit card has an APR of 18.3%., what monthly payment will

Answer 1

pay off the debt in exactly five years?

Answer 2

M= P[r(1+r)^n] OVER (1+r)^n-1