Friend #2 - Credit Card Debt - How long will it take me to pay off my credit card balance of $3,750? The credit card company is charging 10% interest. I can afford to pay $150 month, but would prefer to pay $100 month because I want to continue my cable service. Please show me the answer to both scenarios.

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter6: Using Credit
Section: Chapter Questions
Problem 7FPE
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Your friends were excited to hear you have chosen accounting for a career. They have several practical questions regarding money and interest (time value of money). Please assist your friends by answering their respective questions.

 

For each question:

  1. Estimate without using a table, calculator, etc.

 

  1. Document the “step-by-step” detail showing them how you solved the question.

 

NOTE: To solve use one of the following:

  • EXCEL

 

Include all the detail steps for whichever tool you choose. For example, if using EXCEL show all formulas (copy so reader could duplicate your work). If using a business calculator, in detail in proper order show numbers and buttons you input to obtain your answer.

 

  1. Provide a one to three sentence written explanation to your friend explaining the basic time value of money concept(s) impacting the solution.

 

 

 

Problems start with “Friend #1” at the top of page 2.

Friend #2 – Credit Card Debt – How long will it take me to pay off my credit card balance of $3,750? The credit card company is charging 10% interest. I can afford to pay $150/month, but would prefer to pay $100/month because I want to continue my cable service. Please show me the answer to both scenarios.
A.
B.
Transcribed Image Text:Friend #2 – Credit Card Debt – How long will it take me to pay off my credit card balance of $3,750? The credit card company is charging 10% interest. I can afford to pay $150/month, but would prefer to pay $100/month because I want to continue my cable service. Please show me the answer to both scenarios. A. B.
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