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26 September, 13:37

Suppose you owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12% (or 1% per month), how many years would it take to eliminate your credit card debt if you made no additional new charges? Less than 5 years Between 5 and 10 years Between 10 and 15 years Never, you will continue to be in debt

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  1. 26 September, 13:58
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    Never, you will continue to be in debt

    Explanation:

    the interest per month are 1% of the unpaid amount:

    3,000 x 1% = 30 interest per month

    the minimum payment is 30 dollars

    Therefore, by doing the minimum payment we are just coering the interest generated per month we are not doing any amortization on the principal Hence we cannot repay the debt.
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Home » Business » Suppose you owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12% (or 1% per month), how many years would it take to eliminate your credit card debt if you made no additional new charges?
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