You have an $8000 balance on your credit card,which charges 12% interest annually (1% per month).If you can afford to pay $100 per month,how many months will it take to pay the credit card in full?
A)170 months
B)14 months
C)162 months
D)You will never get the card paid off at that rate.

Question

Quizplus · Accepted Answer

The monthly interest rate is 1% (12% divided by 12 months), so the balance will increase by $80 ($8000 x 0.01) after each payment. Therefore, the equation for the number of months needed to pay off the card is: 
$8000 + ($80 x months) = $100 x months 
Simplifying the equation: 
$8000 = $20 x months 
Months = 400 
However, since payment is only $100 per month, it will take 400 months (or 33 years) to pay off the card in full. This is not a realistic or feasible option. 
To find a more reasonable payment plan, divide the balance ($8000) by the desired monthly payment ($100) to get the number of months needed to pay off the card completely: 
$8000 / $100 = 80 months 
Therefore, it will take 80 months (or 6 years and 8 months) to pay off the card in full, assuming no additional charges or interest are added during that time.

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