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Like many college students, Angie applied for and got a credit card that has an annual percentage rate (APR) of 18%. The first thing she did was buy a new HD Television for $300. At the end of the month, her credit card statement said she only needed to make a minimum monthly payment of $10. Assume Angie makes her payment when she sees her statement at the end of each month. If Angie doesn't charge anything else and only makes the minimum monthly payments, approximately how many months would it take her to completely pay off the HD Television

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jepessoa

Answer:

during the first month, Angie will pay $4.50 in interests and $5.50 in principal

I prepared an amortization table using an excel spreadsheet to determine the number of years it takes to pay off the debt balance.

At the end of the 40th month, her balance will only be $1.53. So the 41st month should be the last month that she pays and her payment should only be $1.55 to payoff her debt completely.