Assume you owe a large balance on your credit card and only pay the monthly minimum payment equal to 1% of the balance.If the annual interest rate on the credit card is 18%,how many years will it take you to pay off the balance assuming you do not make any additional charges to the card?
A) 7.8 years
B) 5 years
C) you will never pay off the balance
D) not enough information is provided to determine the time

Question

Quizplus · Accepted Answer

If you only pay the monthly minimum payment, you will continue to accumulate interest on the remaining balance. This means that the amount owed will continue to grow, making it impossible to ever pay off the balance.

Assume You Owe a Large Balance on Your Credit Card