Question

Asked Oct 17, 2019

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Joey realizes that he has charged too much on his credit card and has racked up $4,300 in debt. If he can pay $125 each month and the card charges 18 percent APR (compounded monthly), how long will it take him to pay off the debt? **(Do not round intermediate calculations and round your final answer to 2 decimal places.)**

Step 1

Given that the loan amount is $4300, the payment per month is $125, annual percentage rate is 18%, as the rate is compounded monthly, the monthly rate is 18% divided by 12 (months), that is equal to 1.5%.

Step 2

We can calculate the time period it will take for Joey to pay off the debt using excel. As the present value is a cash outflow, we have taken it as negative.

Step 3

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