Joey realizes that he has charged too much on his credit card and has racked up $4,000 in debt. If he can pay $200 each month and the card charges percent 20 APR (compounded monthly), how long will it take him to pay off the debt?

Question

Quizplus · Accepted Answer

The monthly interest rate is 20%/12 = 1.6667%. Using the formula for the number of payments to pay off a loan, n = [log(payment) - log(payment - principal * rate)] / log(1 + rate), we find n ≈ 24.53 months.

Joey Realizes That He Has Charged Too Much on His