Question

Taylor has a credit card with an interest rate of 24.5% compounded monthly that she must pay off in seven years. If her balance on the credit card is $2,345, what must her monthly payment be?

Answer 1

I = 0.245 -- Annual Percentage Rate
j = I/12 = 0.020416667 - Monthly Percentage Rate
v = 1/(1+j) = 0.979991833 - Monthly Discount Rate

\(2345.00 = Pmt\cdot(v + v^{2} + ... + v^{84}) = Pmt\cdot\dfrac{v - v^{85}}{1-v}\)

Answer 2

You will struggle until you can build these formulas on the fly!