Credit card company compounds interest at end of each month

Assignment Help Financial Management

Reference no: EM131448419

Like many college students, Kristlne applied for a... Bookmark Show transcribed image text Like many college students, Kristlne applied for and got a credit card that has an annual percentage rate (APR) of 15%. 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 Kristine makes her payment when she sees her statement at the end of each month. If Kristine 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? Assume that the credit card company compounds Interest at the end of each month.

37.8 months

20.8 months

46.3 months

35.8 months

40.2 months

Kristine now realizes she needs to pay more than just the minimum payment (unless she wants to be paying for this HD Television until she graduates). She decides to pay twice the minimum monthly payment ($20 per month), Instead. How much quicker will she pay off the HD Television?

23.1 months

21.1 months

16.8 months

10.3 months

26.4 months

If, Instead, Kristine wants to have the HD Television paid for by the end of the year, what minimum monthly payment must she make?

$26.65

$23.21

$36.10

$35.54

$27.08

Reference no: EM131448419

Questions Cloud

Value of the shareholder’s equity account for this firm : MCI Electronics Inc. has current assets of $178,000, net fixed assets of $65,500, current liabilities of $78,400, and long-term debt of $25,800. What is the value of the shareholder’s equity account for this firm? How much is net working capital?

What is the present value of the bond : Consider a bond issued at the beginning of 2017. It pays a coupon of 10 on October 30, and a coupon of 10 on Dec 31, together with the principal of 100 in December 31, 2017. It is now February 7th, 2017. The annual interest rate is r = 3.6% APR, cont..

Determine the consequences of this transaction : Your company received a $7 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $2 million up front in cash; you also issue a bill for the customer t..

What are earnings per share : Bogus Goods Corp. has additions to retained earnings for the year just ended of $350,000. The firm paid out $160,000 in cash dividends, and it has ended total equity of $4.1 million. If the company currently has 210,000 shares of common stock outstan..

Credit card company compounds interest at end of each month : Like many college students, Kristlne applied for a... Bookmark Show transcribed image text Like many college students, Kristlne applied for and got a credit card that has an annual percentage rate (APR) of 15%. Assume that the credit card company com..

The present value of the free cash flows : Daily Enterprises is purchasing a $9.6 million machine. It will cost $49,000 to transport and install the machine. The machine has a depreciable life of five years, is using straight-line depreciation, and will have no salvage value. Overall, the pre..

Calculating profits on margined and unmargined investments : Claire Gerber wants to buy 900 shares of Google, which is selling in the market for $542.93 a share. Rather than liquidate all her savings, she decides to borrow through her broker at 5 percent a year. Assume that the margin requirement on common sto..

What is the difference between gambling and the stock market : Is the stock market gambling? What is the difference between gambling and the stock market. Are the two really that much different?

Fraction of your money will be invested in risk-free bonds : You own some shares of Microsoft worth $1,000. Beta of Microsoft is 2. Microsoft currently has no debt. Microsoft decides to issue debt and buy back some of its stock in open market. Effectively, you want to undo the leverage of Microsoft. What fract..

User Account

All Pages