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Frank has four different credit cards, the balances and interest information of which are outlined in the table below. He would like to consolidate his credit cards to a single credit card with an APR of 18% and pay off the balance in 24 months. What will his monthly credit card payment be?

Credit Card Balance APR A $2,380 19% B $4,500 15% C $1,580 17.50% D $900 21%

a. $390.00 b. $462.91 c. $467.29 d. $52.00

Respuesta :

sqdancefan

Answer:

  c.  $467.29

Step-by-step explanation:

The total of balances is $9360. The payment can be computed using the amortization formula:

  A = P(r/12)/(1 -(1 +r/12)^-n)

where A is the monthly payment, P is the principal (total balance), r is the annual rate, and n is the number of months.

Filling in your numbers, we have ...

  A = $9360(0.18/12)/(1 -(1 +0.18/12)^-24) ≈ $467.29

Frank's monthly credit card payment will be $467.29.

Lanuel

Based on the calculations, Frank's monthly credit card payment would be: c. $467.29.

How to calculate monthly payment.

Mathematically, the monthly payment for a credit card is given by this formula:

[tex]M=P(\frac{r}{1-(1+r)^{-nt}} )[/tex]

Where:

  • P is the principal.
  • r is the interest rate.
  • M is the monthly payment.
  • t is the time or number of years.
  • n is the number of times it's compounded.

The total balance is given by:

Total balance = [tex]2,380+4,500+1,580+900[/tex] = $9,360.

Note: Interest rate, r [tex]=18=\frac{0.18}{12} =0.015[/tex]

Substituting the given parameters into the formula, we have;

[tex]M=9360(\frac{0.015}{1-(1+0.015)^{-24 }} )[/tex]

M = $467.29.

Read more on interest rate here: https://brainly.com/question/24341207

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