Asked Sep 23, 2019
You have maxed out your $10,000 credit card, which is being charged 12.8%
annual interest compounded daily. What is the minimum monthly payment to continue to break even? How much should you pay each week to get out of debt within one year?

Expert Answer

Step 1

Calculation of minimum monthly and weekly payments:


The minimum monthly payment and weekly payments are $893.73 and $205.41

Calculation of weekly interest rate:


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Weekly interest rate 1- -1 365 0.128 1+ 365 -1 =0.25%

Step 2

Calculation of monthly interest rate:


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31 Monthlyinterest rate = | -1 365 31 0.128 1+ 365 -1 = 1.09%

Step 3

Computation of monthly paym...


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A P(1+i) (1+i)- = S10,000 0.0109(1.0109) (1.0109)- 12 = S893.73


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