Question

A consumer owes $2,550 on a credit card with a 21.9% annual interest rate. Assuming the consumer makes fixed payments and does not charge any more purchases with the card, what is the total monthly payment needed to pay off the card in three years? Show all work and round your answer to the nearest penny.

step by step please

Answer 1

The solution is : $97.25/monthly, is the total monthly payment needed to pay off the card in three years.
Here, we have, given that,
A consumer owes $2,550 on a credit card with a 21.9% annual interest rate.
we can use the formula for the for the monthly payment:
P = +* A/1-(1+ r^-n
where:
P =monthly payment
A =Total loan amount
r = monthly interest rate
(decilmal)
n = total number of payments
SO:
here, we have,
P =monthly payment = x
A =Total loan amount = $2,550 r = monthly interest rate
(decimal) = 21.9%
n = total number of payments =
3
now, we have,
using the formula & calculating we get,
P = $97.25
So, $97.25/monthly, is the total monthly payment needed to pay off the card in three years.