Horace has a credit card with a balance of $12,000. The annual interest rate is 18%. The terms of the credit state that a minimum payment of 3% of the outstanding balance must be paid each month, but no less than $35.00 must be paid each month. Horace plans to stop using the credit card and pay off the balance according to the terms of the credit. How many years will it take to pay off the balance, assuming Horace only pays the minimum required payment? How long will it take to pay off the balance if Horace pays an extra $50.00 per month? How much in addition to the required minimum payments must Horace pay each month if he wishes to pay off the balance in 5 years?
Horace has a credit card with a balance of $12,000. The annual interest rate is 18%. The terms of the credit state that a minimum payment of 3% of the outstanding balance must be paid each month, but no less than $35.00 must be paid each month. Horace plans to stop using the credit card and pay off the balance according to the terms of the credit. How many years will it take to pay off the balance, assuming Horace only pays the minimum required payment? How long will it take to pay off the balance if Horace pays an extra $50.00 per month? How much in addition to the required minimum payments must Horace pay each month if he wishes to pay off the balance in 5 years?
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 19DQ
Related questions
Question
- Horace has a credit card with a balance of $12,000. The annual interest rate is 18%. The terms of the credit state that a minimum payment of 3% of the outstanding balance must be paid each month, but no less than $35.00 must be paid each month.
Horace plans to stop using the credit card and pay off the balance according to the terms of the credit.
- How many years will it take to pay off the balance, assuming Horace only pays the minimum required payment?
- How long will it take to pay off the balance if Horace pays an extra $50.00 per month?
- How much in addition to the required minimum payments must Horace pay each month if he wishes to pay off the balance in 5 years?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT