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You have a balance of $500 on your credit card and make no more charges. Assume the card carries an APR of 19%. Suppose you want to pay off the card in six months by making equal payments each month. What is your monthly payment?

Respuesta :

Answer:

The monthly payment would be $ 87.76

Step-by-step explanation:

Since, the monthly payment formula of a loan,

[tex]P = \frac{PV(\frac{r}{12})}{1-(1+\frac{r}{12})^{-n}}[/tex]

Where,

PV = present value of the loan,

r = annual rate of interest,

n = number of months,

Here, PV = 500, r = 18% = 0.18, t = 6 months,

Hence, the monthly payment,

[tex]P=\frac{500(\frac{0.18}{12})}{1-(1+\frac{0.18}{12})^{-6}}[/tex]

[tex]\approx \$ 87.76[/tex]   ( using calculator )

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