Your credit card company charges a monthly compound interest rate of 2.5%. If you have an outstanding balance (money that you owe) of $2500, how much would it cost you to pay off this debt 2 years later? (Assuming no additional charges on the credit card.) You can round the answer to the nearest integer.

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25 August, 02:15

Your credit card company charges a monthly compound interest rate of 2.5%. If you have an outstanding balance (money that you owe) of $2500, how much would it cost you to pay off this debt 2 years later? (Assuming no additional charges on the credit card.) You can round the answer to the nearest integer.

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Answers (1)

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Ponce · Answer 1

FV = $4521.81

Explanation:

Giving the following information:

Your credit card company charges a monthly compound interest rate of 2.5%.

Debt = $2500

n = 24 (monthly)

We need to use the following formula to calculate the final value of this debt.

FV = PV * (1+i) ^n

PV = present value

FV = 2500 * (1+0.025) ^24

FV = $4521.81