Question

Ramiro is also a college student. He has a credit card balance of $500.00. The APR on his card is 18.24%. His minimum payment is $10.00. (do not use commas or dollar signs in the answers)

If Ramiro stops using his credit card, how long will it take him (in months) to pay off the $500.00 if he makes only the minimum payment?

Answer 1

Using the formula for the number of months to pay off a credit card balance with minimum payments:

Number of months = (-1/30) * log(1 - (balance * monthly rate / payment))

where balance is the initial balance, monthly rate is the APR divided by 12, and payment is the minimum payment.

Plugging in the given values, we get:

Number of months = (-1/30) * log(1 - (500 * 0.01824/12 / 10))

Number of months = 46.05

Rounding up to the nearest whole number, it will take Ramiro 47 months to pay off his credit card balance with only minimum payments.

Explanation: