Assume you have a balance of $3200 on your credit card that you want to pay off. Calculate your monthly payment andtotal payment under the given conditions. Assume you make no additional charges to the card.
-The credit card APR is 19% and you want to pay off the balance in 1 year.

Question

Quizplus · Accepted Answer

To calculate the monthly payment for paying off a $3200 balance in 1 year with a 19% APR, you can use the formula for the monthly payment on an installment loan: $P = \frac{rPV}{1 - (1 + r)^{-n}}$, where P is the monthly payment, r is the monthly interest rate (APR/12), PV is the present value or initial loan amount, and n is the total number of payments. Here, r = 0.19/12, PV = $3200, and n = 12. Plugging these values into the formula gives a monthly payment of approximately $294.90. Multiplying this monthly payment by 12 gives the total payment of approximately $3538.81.

Assume You Have a Balance of $3200 on Your Credit