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Calculating the time period needed to pay off the given loan

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You ran a little short on your spring vacation, so you put a $1,500 on your credit card. You can only afford to make the minimum payment of $30 per month. The interest rate on the card is 1.5% per month. How long will it take you to pay off the $1,500 (assume end of the month payments)? How much total interest will you pay?

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Solution Summary

Solution describes the steps to estimate the required time to payoff the given amount on a credit card if minimum payment is made each month. Calculations are carried out with the help of suitable formulas.

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Present Value of loan amount=PV=$1500
Number of periods=n=?
Interest rate=i=1.5% per ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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