Question

At the start of January, you have a credit card with a balance of $498, a credit limit of $900, and an interest rate of 15%. You make monthly payments of $35. At the end of which month will your balance be below the target debt ratio. (They consider the target debt to be 1/2 the credit line or less).

Jan
Feb
March
April

Answer 1

Everytime I try to figure it out, it never gets paid off cause the interest just makes it go up and up

Answer 2

There may exist a formula for this problem, but it might be simpler just do the month to month calculations, since the maximum number of months is four, and minimum 2.
Target debt is $900/2=450 or less.
ASSUME payment is at the end of the month, then

At the end of January:
Debt carried over=$498
add interest = $498*0.15/12)=$6.30;
total debt=498+6.30=504.30
debt after payment = 504.30-35=$469.22

At the end of February:
....
continue as above until debt after payment is at or below $450.

Answer 3

ooooh i was doing 15% every month

Answer 4

thank you!

Answer 5

Interest rate of 15$ (0.15) applies to all year, yes, for one month it is 0.15/12!

Answer 6

you're welcome ^_^