Question

A new employee charged $7220 on his credit card to relocate for his first job. After noticing that the interest rate for his balance was 27% compounded monthly, he stopped charging on that account. He wishes to pay off his balance in years using automatic payments sent at the end of each month.

a. What monthly payment must he make to pay off the account at the end of 4 ​years?
b. How much total interest will he have​ paid?

Answer 1

a. The monthly payment must be $193.53 in order to pay off the account at the end of 4 years.

b. The total interest paid will be $4372.02.