At the start of January, you have a credit card with a balance of $498, a credit limit of $900, and an interest rate of 15%. You make monthly payments of $35. At the end of which month will your balance be below the target debt ratio.

Question

Mathematics

Shyla

20 December, 08:39

At the start of January, you have a credit card with a balance of $498, a credit limit of $900, and an interest rate of 15%. You make monthly payments of $35. At the end of which month will your balance be below the target debt ratio.

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Answers (1)

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Cannon Klein · Answer 1

There may exist a formula for this problem, but it might be simpler just do the month to month calculations, since the maximum number of months is four, and minimum 2.

Target debt is $900/2=450 or less.

At the end of January:

Debt carried over=$498

add interest = $498*0.15/12) = $6.30;

total debt=498+6.30=504.30

debt after payment = 504.30-35=$469.22

continue as above until debt after payment is at or below $450.