Explore BrainMass
Share

Explore BrainMass

    Calculating the monthly payment

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com October 10, 2019, 4:27 am ad1c9bdddf
    https://brainmass.com/economics/the-time-value-of-money/calculating-monthly-payment-461284

    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 ...

    Solution Summary

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

    $2.19