Purchase Solution

# Calculating the monthly payment

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Fred and Wilma have a credit card debt of \$20,000 that has an 15% APR interest rate compounded monthly.

a. What payments would they have to make to pay this off in 5 years assuming that no additional purchases are made with this card?

b. What happens if they would make only a \$200 a month payment? Explain why?

##### Solution Summary

This solution describes the steps to calculate monthly payment with the help of functions in MS Excel.

##### Solution Preview

a) What payments would they have to make to pay this off in 5 years assuming that no additional purchases are made with this card?

PV of loan=PV=20000
Rate of interest=RATE=15%/12=1.25% per month
Number of periods=NPER=60 ...

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