Math 1050 Credit Card Debt Assignment name Melis, Wall statement and must now deal with the financial realities of last month's You have received your monthly credit card ion, dealing with the $2000 in credit card birthday celebration. While your milestone in years was deserving of a celebrat charges will require some planning. (Annual Percentage Rate) for your balance to be 14.4%. This is the yearly Your credit card statement lists the APR ( ince. The credit card company interest rate the credit card company uses in calculating interest due on your bala compounds interest monthly. Your monthly interest rate on credit card charges will be: APR _ 0144 _ 9.012 12 12 .e 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 filing in the following table using the minimum monthly payment of $25. Round each answer to the nearest cent. Month Old Balance Interest Payment New Balance 1 $2000.00 $24.00 $25.00 $1999.00 2 $1999.00 $23.99 $25.00 $1997.99 3 $1997.99 23.98 $25.00 1996.97 4 1996.97, 23.96 $25.00, 1995-7 5 $1945.93 23.95 $25.00 1994. 88 6 $994.8: 23.94 $25.00 $1933.82. 7 $1993.82 $23.93 $25.00 $1992.75 8 1992.75 $23.92. $25.00 $1941.67 9 1941.67 $23.40 $25.00 $1990.55) 10 $1990.5 $23.84 $25.00 1984.46 iL 1984.46 $23.88 25.00 (988.34 12 19.99.24 $23.87 $25.00 1987. 21 2. What is the total amount that has been paid to the credit card company at the end of the first year? $300 3. How much of the original balance has been paid off at the end of the first year? $12.74Math 1050 Credit Card Debt Assignment ‘4. From looking at the new balances over the first year, how many years do you think it will take to pay off the $2000? Name (This is a guess so there is no wrong answer. Before moving on, write down your best estimate.) 193 years 5. A formula for calculating the payment, P , required to pay off a debt of amount Din M months with monthly interest rate i is solving for M to the end of this assignment. M= 264.3 months 6. Use your formula for M to fill in the following table for the given values of P, using D=$2000.00 and i= 0.012. Attach all your work to the end of this assignment. i 1-(1+i)” Solve this formula for M , where M is the number of months it will take to pay off adebt D. Attach all your work in. Monthly Payment P $25.00 $50.00 $75.00 | Round te trodeer ert 164.85 54.82 | 32.33 (teu nearest rh ea) 244 | 457 | 2.69 me (824 | aso | tas next nearest cent. 7. (a) How large would your monthly payment have to be in order to pay off your debt in 12 months? Round up to the qya 45 {b) What is the total amount paid to the credit card company, $14.95 rounded to the nearest dollar?Name ‘Math 1050 Credit Card Debt Assignment ‘8, What is the best plan for paying off the $2000? Why? Paying more than minimam payments per Month. Lt helps the amount 49 be owed go down faster. ‘9. What is the worst plan? Why? Doing only yne minimum payment per month, T+ makes not much difference, 110. What should you do if you cannot afford to make the payments required by the best plan? Then TL shouldn't start the plan in the first Place. 11. What are two things that the average consumer can learn by completing this assignment? + Going nto dept can be dangerous. People may use more dime ih it Yhon needed. © Being in debt means more than near average should be paid Por month. the interest won't gtoP as their is still debt x0 pay.Gay 4 . Le aides 2000: 0.018 = (4-0.012)-" = 9.000.012 eee =(it 0.012 22000 2-012 ef UH ceecra me Conroe nf 28 oat ae = Mba (10.012) = sea nw ™ (208923012. 57) —In (10. ow) 269.85 = pee 0-0.012 4, pep ~ $5.2! 4 : 1+0.0 i ©) p=2900-0.01 bie ehed 14.88 | LOZ@ 50.2 0.012. 4 1- 0 Soe (\40-012)-} 32000" 0.01% go> (Av (cl F0.0127" = 9000 2-018 50 — (140-012) = 2000+ 0.012 $0 mI 2000 10-012 3 (140.012) = — tw COO. 21M apn (20080-012 ) a mts (140.02) = nn (anole 45 “ m=. {2000 1.090. -0.012 +i) AE 90 In 0-012) 54.92 2 dn (220900012 54.822 dn (2g5 012 4) ~ An. \+0, 012) 3 22000. 0.0R. ; WS aT * : .rs tance Pease 168 1-00 7s Ci> +0. Be 2000 -0, ole’ i= Ut gota)“ = Bee ee ' —(t+0.012)74 Bees. 2.012 | : ! (l40.02)-4 a =2006 0,012 Ht a ((+0.02-") 2 an (=2099-0.012, +) —M + hn (1 $0.02) S2n ~1000: pee = 2*/-wo00,0.018 ms (egg +!) — An (140.012) 32.3704 Ha (2022: 2.012 +) ' IS : hot 4H (1 $0,012). i er Me care . Mm C1400 Bs ‘ 5 shes +} note a | Fae “—Oreeoo0g0