Question
Asked Sep 23, 2019
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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?
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Expert Answer

Step 1

Calculation of minimum monthly and weekly payments:

Answer:

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%

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Step 2

Calculation of monthly interest rate:

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

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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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