Question

Help? Tried to do something with the Compound Interest Formula but hit a wall?
Rae owes $2,019 on a credit card with a 17.7% interest rate compounded monthly. What monthly payment should she make to pay off this debt in three years, assuming she does not charge any more purchases with the card?

Answer 1

This is what i have so far.
Compound interest formula: A = P(1 + r/n)^nt
A = 2019(1 + 0.177/12)^12(3)
A = 2019(1 + 0.177/12)^36
A = 2019(1 + 0.01475)^36
A = 2019(1.01475)^36
A = 2019(1.69404974724)
A = 3420.29

I was thinking i could do that and divide the answer by 36 (cause thats how many months are in 3 years) but its not one of my answer choices...

Answer 2

HI!!

Answer 3

the formula you are using is for compound interest, not payments
the formula for payments in entirely different

Answer 4

Oh ok. What is the formula for payments? @misty1212

Answer 5

\[\huge \frac{P\times \frac{apr}{n}}{1-(1+\frac{apr}{n})^{-ny}}\]

Answer 6

in your case \(n=12,y=3, P=2019,r=.177\)

Answer 7

\[\huge \frac{2019\times \frac{.177}{12}}{1-(1+\frac{.177}{12})^{-36}}\]

Answer 8

Wow thanks! Ill let you know what i get. :)

Answer 9

monthly payments about \($72.69\)
http://www.wolframalpha.com/input/?i=+ \frac{2019\times+\frac{.177}{12}}{1-%281%2B\frac{.177}{12}%29^{-36}}

Answer 10

Awesome! Thank you so much! :)

Answer 11

I think i did something wrong... Can someone check my math??