Jose wants to pay off his credit card balances within 18 months. He is trying to decide if he should use his $1,750 in savings to pay off part of the balances or if he should transfer the balances to a new card with a low introductory rate. The new credit card has an introductory rate of 8% but charges a balance transfer fee of $60 for each balance transfer. Jose decides to pay off Credit Card B using his savings and then transfer the balance of Card A to the new card. Which of the following options shows the amount of Jose's new monthly payment? Credit Card A: $1,154 Credit Card B: $1,469 a. $90.43 b. $68.25 c. $71.80 d. $75.34

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Mathematics

8 December, 00:20

Jose wants to pay off his credit card balances within 18 months. He is trying to decide if he should use his $1,750 in savings to pay off part of the balances or if he should transfer the balances to a new card with a low introductory rate. The new credit card has an introductory rate of 8% but charges a balance transfer fee of $60 for each balance transfer. Jose decides to pay off Credit Card B using his savings and then transfer the balance of Card A to the new card. Which of the following options shows the amount of Jose's new monthly payment? Credit Card A: $1,154 Credit Card B: $1,469 a. $90.43 b. $68.25 c. $71.80 d. $75.34

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Phantom · Answer 1

We are given with the following:

Credit Card A: $1,154

Credit Card B: $1,469

18 months to pay the credit card balances

Credit B introductory rate of 8% and transfer fee of $60

Since Jose decides to pay off Credit Card B using his savings and then transfer the balance of Card A to the new card.

He has enough savings to pay off all of the balance in Credit Card B and what's left is the balance in A. If the transfer costs $60 dollars, the new balance will be:

$1154 + $60 = $1214

Since the rate is 8%, the monthly payment will be

1214 (1.08) / 12 = $71.80