Question

you pay off a debt of $800 by paying 25% of the remaining balance each month. what will be the remaining debt after 12 months

Answer 1

$25.34

Explanation:

You want the remaining debt after 12 months if 25% of the remaining balance of an initial $800 debt is paid each month.

Reduction factor

After each payment, the remaining debt is (1 -25%) = 0.75 times the amount before the payment. After 12 payments, the remaining amount is ...

800·(0.75^12) ≈ 25.34

After 12 months, the remaining debt is $25.34.

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