Solve the problem. Assume no new purchases are made with the credit card.
-The annual interest rate on a credit card is 20.99%. If a payment of $100.00 is made each month, how long will it take to pay off an unpaid balance of $1546.15?
A) 19 months
B) 18 months
C) 13 months
D) 21 months

Question

Quizplus · Accepted Answer

To find the number of months required to pay off the balance, we can use the formula for the monthly payment on a loan: M = P * (r(1+r)^n) / ((1+r)^n - 1), where M is the monthly payment, P is the principal balance, r is the monthly interest rate, and n is the number of payments. Here, the monthly interest rate is 20.99%/12 = 0.0174917. Solving for n with M = $100 and P = $1546.15 gives approximately 19 months.

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