Math 1050 Credit Card-Debt Assignment Toulhave received your monthly credit card statement and must now deal withthe financial realities of last month's lrthday 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 145%. This isthe 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: AR =O 0.012083 12 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 $2000.00, $1999.17 AB SB a 14g; a 4 a 1 fz: interest Payment $24.17 $25.00 ZcS YW. ZS Se 20. we u. aH ZUo: 24 on Zz New Balance $1999.17 ig Taq IK 14 1a iq 144 2. U a TQ i What is the total amount that has been paid to the credit card company at the end of the first year? ZSx BR =S0O. 00 How much of the original balance has been paid off at the end of the first year? $ lOve 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.) 50 pass w/ wid aneMath 1080 cre cad Debt Asgnment vame FASS Nr tA formula for calculating the payment, P, required to payoff a debt of amount Din M- months with monthly interest rate i is Dui (sy wants formula so for to determine the number months it wil take to pa off he S2000 read debt SER minimum monthly payments of $25. Round the number of monthe wo two decimal places, (Attach all Work for this @ssignment to the. end.) 2 = : Zpoo (tus) Nees poe F i Ss : , @ C4l-enaar* Maclwd sk Era. 2E2-Stuunts) How long is this in years, rounded to the nearest tenth of a year? FEES Ly 20 ge ‘Whats the total amount paid to the Sredit card company, rounded to the nearest dollar? Zao X25, Hog a many months will be required to pay off the debt if you pay $50 each month? Round to two decimal places. 1G L.dea = = RX =-Sieo_ (ey Gee. - ZBI SU Atty les, q Oleegy -OSZNE How long is this in years, rounded to the nearest tenth of a year? BAF = UG Sear What is the total amount paid to the credit card compan 4.6 «50 $779 244 founded tothe nearest dollar? = * ‘4 How many months willbe required to pay off the debt if you pay $75 each month? Round to two decimal places. Z41G I-. 2221 “7EaGaq (68> = 32. Smarty as oos2g How long is this in years, rounded to the nearest tenth of a year? CL Yes ‘What is the total amount paid to the credit card company, rounded to the nearest dollar? 2-4 XFS x10 2.430)s. How large would your monthly payment have to be in order to pay off your debt in 12 months? Round yp to the next Nearest cent, Pe 2U.G — I= Cored _ Cefieo.c6 Bore) © SRG What Ls unt to the credit card company, rounded to the nearest dollar? $zwo<2 Paying, Hee wiosh possi ts best to veduee amor pact te sco inbesesh. ‘What is the worst plan? Why? P39 dhce wrinivanm WW cree He lptnee. te A mda Were on interest, Puthape Wore tan LNA [wanocl y, de Fak Place. ‘What should you do if you cannot afford to make the payments required by the best plan? Ry as wwe as gossikk. 7. What are two things that the average consumer can learn by completing this assignment? PTH an lam tpsr hoe moda cam be Sa by paging Were than miainwn ptymers, ns ish Detoslti i. Mew can Seo Now ie ~ asl paid eo en rales Man jest the oF'93 (pou quaourh.P25 G = gene wm D=2,000 (4S if . etzoe 280 ~ (145) On caw = 00eHy 2S | (1. ORD = gocy *PRSE= | O120g4 -\X= log (ora BIG ESS) : “Nee | log (Loizoe) = 0082 14g4 * ZBL SA months