Question

I NEED HELP WITH THE FORMULA

Newton uses a credit card with a 18.6% APR, compounded monthly, to pay for a cruise totaling $1920.96. He can pay $720 per month on the card. What will the total cost of this purchase be?

Answer 1

Beginning Balance:$1920.96 Finance charge 18.6% *1920.96=357.29
$1920.96+$357.29=2278.25 - payment $720=1558.25 New Balance $1558.25*18.6%=$289.83+new balance=$1848.10-payment $720.00=$1128.10
1128.10*18.6%=$209.83 +new balance=$1337.93- payment $720.00=617.93
New Balance 617.93*18.6%=$114.93+new balance=$732.86-payment 720.00=12.86. That is how you work it out. The interest is compounded monthly,add all the payments he made and all the interest he paid. And you will have your answer.