Math 1050 Credit Card Debt Assignment Name WDanis\ Vorkinen 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 $1900 in credit card charges will require some planning. Your credit card statement lists the APR (Annual Percentage Rate) for your balance to be 13.5%. 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 _ 0.135 2/12 = 0.01125 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. 4. 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 | 1 ‘$1900.00 $21.38 $25.00 $1896.38 2 $1896.38 BUSS W2S oo Bi892.7\ 3 Big HUW BtS.09 1924.00 4 AN%33.99) HAWS Prswo BigsS.2S 5 BABBSAUS HR. 21 BLS wo) SH gsl 4h 6 BVSSIAL RUA BUS we SARL 7 BASIS Hy 1% Bis SATIVA & HAST FU. 0% HigGaad 9 B V8L9.99 BU S1gbS.87 10 PIG H20194 HASt1 96 a HARGLSL 20.9 #1357 .8) 42 Wigsy el $20.40 Bigsy 1 What is the total amount that has been paid to the credit card company at the end of the first year? v0 inal balance has been paid off at the end of the first year? HY From looking at the new balances over the first year, how many years do you think it will take to pay off the $1900? (This is a guess so there is no wrong answer. Before going on to step 2, write down your best estimate.) UW yearsMath 1050 Credit Card Debt Assignment Name anis\ Woroun 2. A formula for calculating the payment, P,, required to pay offa debt of amount Din M months with monthly erest rate f is spa ~1-(1+i) formula, solve for M to determine the number of months it will take to pay off the $1900 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.) Zs = Poo (vies) YC ee oritsy7m TVA How long is this in years, rounded to the nearest tenth of a year? AY yeres What is the total amount paid to the credit card company, rounded to the nearest dollar? yIUM ¥aus = H4rs.ts 3. How many months will be required to pay off the debt if you pay $50 each month? Round to two decimal places. sos swell 49, 94 ye Uye ones a How long is this in years, rounded to the nearest tenth of a year? UL years ‘What is the total amount paid to the credit card company, rounded to the nearest dollar? Yrngse x SOS HIB 4, How many months will be required to pay off the debt if you pay $75 each month? Round to two decimal places. Ts= ave (ours) ~ Tay V=Qy wings How long is this in years, rounded to the nearest tenth of a year? LS Yews What is the total amount paid to the credit card company, rounded to the nearest dollar? Ie SS S NLU ES‘Math 1050 Credit Card Debt Assignment Name Dania \edocior 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. nt nearest ce 5 PaUsis Pa tre(otts SEE = a sPUTSEISWDA y—Cre.onsy = ps wis P = Bi7o.15 | rua — ~ What is the total amount paid to the credit card company, rounded to the nearest dollar? YreiS KID =H 2oyl. Go 6. What is the best plan for paying off the $1900? Why? Th best Plen Ge Pong ote 40 dabt Ga 12 mnths heeawe, Less interns part. ‘What is the worst plan? Why? The ers plan i> peti A minim typed heen ys oP ~e YR, wr 4 dose Lg acipec Amway What should you do if you cannot afford to make the payments required by the best plan? Poy ay omveh aS Yow "Prince, Lan. Reying eaten chips aay at 7. What are two things that the average consumer can learn by completing this assignment? oT winless PSIMt Ye ealetlad aA by lenders te ben > WN Wk emest Sates. Ray maa Han Ey minim payeeat SE y=" 2S = 1900 (ONS) 1 = (+ vonrsy\7 poe lS Y= (\.orsy™ 2(\- Cvomsy™) = USHS Us —lourey =USIS Lys ake =r9(\ewsy™= - Biers a aS Qoowesy™= ls = Les (sons) = Los (195) Log CONS) Loy Cy otis) HM Log Lilts) Log eons) = Me —VIUb] O0KI) Me 17 b1494 MILA@D soz Woo (ans) VCs oyasye™ Set h3s V= Coons % 2 - So Chor y™ = t37$ se -Se -50 (1.0 tSY™ 2 - UsbUS a =S$s_ hows = . S725 =r Ney (otndh® Jog (18728) You Liatits\ og (ott) HME -4IFSSHEEW M= 4g 75 = je [,01125) emt = 1,49 ON 1-Ui+,ones\-* MeN, Ts = Wi S1S 2 i \-(reonesy™ 9S -15 (jeonesy ™ = US ys -13 ~FS (rosy = $3,425 ~715 <5 lrones”” = 71S | = Jog touts) = Jos (718) \ Yog Lesnar} dag C rrotts) |