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22 May, 11:24

Laura owes $4759 on a credit card with a 20.9% interest rate compounded monthly. What is the monthly payment she should make in order to pay off this debt in 3 years, assuming she does not charge any more purchases with the card?

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  1. 22 May, 12:15
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    This can be calculated using the formula:

    P = L ((r/n) * (1 + r/n) ^ (n*t)) / ((1 + r/n) ^ (n*t) - 1)

    Where:

    L = 4759

    r = 0.209

    n = 12

    t = 3

    So plugging in our dа ta:P = 4759 ((0.209/12) * (1 + 0.209/12) ^ (12*3)) / ((1 + 0.209/12) ^ (12*3) - 1)

    Which will give us the amount of: $179.05 is the monthly repayments.

    Other info:

    Total interest:$1,686.80

    Total cost:$6,445.80
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