Math S060 Cad Card Debt Asgnment nme SO You have received your monthly credit card statement and must now deal with the financial realities of last month's, birthday celebration, While your milestone in years was deserving of a celebration, dealing with the $2000 in credit card charges will require some planning, Your credit card statement lists the APR (Annual Percentage Rate) for your balance to be 14.5%, This is the yearly interest rate the credit card company uses in calculating interest due on your balance. The credit card company ‘compounds interest monthly. Your monthly interest rate on credit card charges will be: APR _ 0.145 2 12 = 0.012083 ‘The minimum payment required by your credit card company is $25/month. Assuming that you do not make any new charges to your account, answer the following questions to help you determine the best plan for paying off this credit card debt. 1, To begin with, let's check out the plan of only paying the minimum amount due each month. To get a feel for how this will affect the balance, finish filling in the following table using the minimum monthly payment of $25. Month | Old Balance interest Payment New Balance a $2000.00 $24.17 $25.00 $1999.17 2 $1999.17 24-0 as TAS.32. [3 442.22. HAS 5 147 7 4 egg Cd 25 1A 4p. 1 | 5 144 le lL 24.2 2o 146.74 | 6 1446 73 Gut 2s 14 7 1444 x 24-10 23 1443.44 8 (42 AS 25.04 S \AG 3. OF 3 1GAg . 04 ZF 442. 1. 10 1442. [> 24-07 2S. 144]. 20 i 144]. 20 A Ola. 2 1440. 20 12 1940. 20 24-05 2S 4], A ‘What is the total amount that has been paid to the credit card company at the end of the first year? \a. 9S =#300 How much of the original balance has been paid off at the end of the first year? H 2000 - $1,984.41 = 410.04 From looking at the new balances over the first year, how many years do you think it will take to pay off the $2000? (This is a guess so there is no wrong answer. Before going on to step 2, write down your best estimate.) \S yearsMath 1050 Credit Card Debt Assignment Name 2. A formula for calculating the payment, P, required to pay off a debt of amount Din IM months with monthly Interest rate / is Using this formula, solve for M_ to determine the number of months it will take to pay off the $2000 credit card debt with minimum monthly payments of $25. Round the number of months to two decimal places. (Attach all work for this assignment to the end.) CHD yin ge: SHE +1) -InCi ti? “ner SE ic * 283.12 men¥he How long is this in years, rounded to the nearest tenth of a year? 233 \8/IL 223.0 years ‘What is the total amount paid to the credit card company, rounded to the nearest dollar? \n =. VI4S wh) Ane * ia! os 4 074 M = %% X471,074 “Wy + oe 3. How many months willbe required to pay off the debt if you pay $50 each month? Round to two decimal places. 2500. Ite N- ne wt a) 2 SEAE montis “in 8 How longis this in years, rout tothe nearest tenth of a year? 54.98/22 4.0 years What is the total amount paid to the credit card company, rounded to the nearest dollar? In 298, aati) - In (4 Oe Oh oS 4. How many months willbe required to pay off the debt if you pay $75 each month? Round to two decimal places. 2000. ONS \n ¢ 1. “a \ > N= ~ A Os 1s. -In (+ How longis thin years, rounded to the nearest tenth of year? BA-PB/NAX dol Years agoo ole di tH Ce - Oe a.) S50 x Ha,m44 4 32.33 mevitns WIS 42H A429Math 1050 Credit Card Debt Assignment Name 5. How large would your monthly payment have to be in order to pay off your debt in 12 months? Round up to the next nearest cent. vi 412000 . SAS —— 12600" '2a $190.05 t-lay ~ (ets yr 2 What is the total amount paid to the credit card company, rounded to the nearest dollar? 190.05 ° la =a 6. What is the best plan for paying off the $2000? Why? Fapinnss $180-0S 1s the best ophon, A You will only Porgy ailol woteyecd. ‘What is the worst plan? Why? Making, Ye yninimum payment of das Will yasult iid paging rmuthple nines over what was used What should you do if you cannot afford to make the payments required by the best plan? Evaluating yur finances veglarvivg and waking lalexr Raymond wren gou tan, will help in parying, Ye aalahie off 7. What are two things thatthe average consumer can learn by completing this assignment? LH AS Witpoytzmd to be Cwvehal Wren using; Cvedt rds, and best te only we useel for emergenues. a W Ups weed bh use a creck cavel, pay She balance off Yegularly, ancl avoid making eviky a minimum payinent-