Due to poor spending habits,Ricky has accumulated $10,000 in credit card debt.He has missed several payments and now the annual interest rate on the card is 18.95 percent! If he pays $175 per month on the card,how long will it take Ricky to pay off the card?
A)121.5 months
B)148.50 months
C)162.5 months
D)Ricky never pays off the carD.PV = 10000; PMT = -175; I = 18.95/12; FV = 0; = N = 148.50

Question

Due to poor spending habits,Ricky has accumulated $10,000 in credit card debt.He has missed several payments and now the annual interest rate on the card is 18.95 percent! If he pays $175 per month on the card,how long will it take Ricky to pay off the card?
A)121.5 months
B)148.50 months
C)162.5 months
D)Ricky never pays off the carD.PV = 10000; PMT = -175; I = 18.95/12; FV = 0; => N = 148.50

Quizplus · Accepted Answer

Using the PV function in Excel, we can calculate that Ricky will need 148.50 months (or approximately 12.38 years) to pay off the credit card debt if he pays $175 per month. This is assuming he makes no additional charges and always pays the minimum amount due. It's important to note that he will end up paying a total of $25,976.85, which is $15,976.85 in interest alone. It's always best to pay off credit card debt as quickly as possible to avoid accumulating high interest charges.

Due to Poor Spending Habits,Ricky Has Accumulated $10,000 in Credit