Question

Keith owes $4,512 on a credit card with a 17.3% interest rate compounded monthly. What is the monthly payment he should make in order to pay off this debt in 12 months, assuming he does not charge any more purchases with the card?

$915.50

$74.54

$376.00

$412.16

Answer 1

what did you get?

Answer 2

if you're completely stuck, use this formula

P = L((r/n)*(1 + r/n)^(n*t))/((1 + r/n)^(n*t) - 1)

or this calculator

http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx

Answer 3

Honestly I got $844 or something like that

Answer 4

that's a bit too high

Answer 5

I probably used the wrong formula

Answer 6

probably

Answer 7

Ah, I got $74.54 with the formula.

Answer 8

Thanks!

Answer 9

no that's not correct

Answer 10

how did you get that?

Answer 11

Oh, seriously.. I just plugged in all of the numbers into the formula you gave me

Answer 12

how so

Answer 13

There was not "t" listen in the equation so I just used 12

Answer 14

no*

Answer 15

remember 12 months = 1 year

Answer 16

t is time in years

Answer 17

P = 4512((0.173/12)*(1 + 0.173/12)^(12
*12))/((1 + 0.173/12)^(12*12) - 1)

Answer 18

t isn't 12 though

Answer 19

The equation doesn't listen a time frame? It just says 12 months

Answer 20

Unless I'm missing something

Answer 21

12 months = 1 year, so t = 1

Answer 22

not t = 12

Answer 23

Ohhhh

Answer 24

$412.16

Answer 25

better

Answer 26

One question, if it said "What is the monthly payment she should make in order to pay off this debt in 2 years, assuming she does not charge any more purchases with the card?" would t still = 1? or would it = 2?

Answer 27

t would turn into t = 2 because it's not 1 year anymore, it's 2 years

Answer 28

Okay, thank you!

Answer 29

np