How long will it take him to pay off his credit card debt

Assignment Help Financial Management
Reference no: EM131618674

Michael has credit card debt of $75,000 that has an 12% APR, compounded monthly. The minimum monthly payment only requires him to pay the interest on his debt. He receives an offer for a credit card with an APR of 4% compounded monthly. If he rolls over his debt onto this card and makes the same monthly payment as before, how long will it take him to pay off his credit card debt?

Reference no: EM131618674

Questions Cloud

Accounts has the highest? ear : Which of the following accounts has the highest? EAR?
Available to pay for their? child college education : Suppose that young couple has just had their first baby and they wish to ensure that enough money will be available to pay for their? child's college education.
Howard is saving for long holiday : Howard is saving for a long holiday. He deposits a fixed amount every month in a bank account with an EAR of 12.7?%.
The higher the corporate income tax rate : The higher the corporate income tax rate, the lower the effective cost of
How long will it take him to pay off his credit card debt : If he rolls over his debt onto this card and makes the same monthly payment as before, how long will it take him to pay off his credit card debt?
How much is the outstanding principal balance on his loan : After he has made the first 20 payments, how much is the outstanding principal balance on his loan?
What is the cost of equity capital for this firm : An all-equity firm produced a dividend flow of $45,000 last year. What is the cost of equity capital for this firm?
What are differences between efficiency and effectiveness : When would it make sense to use a flexible budget as compared to a forecast budget? What are the differences between efficiency and effectiveness?
Determine how much you will have saved after six years : Determine how much you will have saved after 6 years. Determine the amount saved if you were able to deposit $64,000 each year.

Reviews

Write a Review

Financial Management Questions & Answers

  Distinguish between the different types of risks

Distinguish between the different types of risks in which it is involved and ways in which these risks have been managed or mismanaged since 2005 in this bank

  How many years will it take to reach your goal

You expect to earn 13% annually on the account. How many years will it take to reach your goal?

  An impressive milking system

One theory suggests that financial companies should be allowed to operate with minimal if any regulatory constraints. It is assumed that company leaders will behave in the best interest of themselves and their stockholders; Where applicable, test thi..

  Annual interest rate for discounting cash flows remains

What is the resulting CLV if the annual interest rate for discounting cash flows remains the same as in Q1 (i.e. 12%)?

  The flotation-adjusted cost of equity

Suppose that Tan Lotion's common shares sell for $18 per share, are expected to set their next annual dividend at $1.00 per share, and that all future dividends are expected to grow by 7 percent per year, indefinitely. If Tan Lotion faces a flotation..

  How much interest do you pay over the life of the loan

You are thinking about buying a home for $120,000 and can put down $20,000. If the lender charges a fixed rate of 6.5% and you want a 30 year mortgage, what is the monthly payment on the $100,000 loan? How much interest do you pay over the life of th..

  Calculate annual coupon interest payments

Assume that today's date is February 15, 2015. Robin Hood Inc. bond is an annual-coupon bond. Par value of the bond is $1,000. Calculate annual coupon interest payments. Company-Robin Hood Price-128.499 Coupon Rate-6.534 Maturity date-2-15-2035 YTM- ..

  Weighted average implied by two outstanding debt issues

Filer Manufacturing has 7.4 million shares of common stock outstanding. The current share price is $44, and the book value per share is $5. Filer Manufacturing also has two bond issues outstanding. Assume that the overall cost of debt is the weighted..

  What is the smallest expected gain

A stock has an annual return of 11 percent and a standard deviation of 54 percent. What is the smallest expected gain over the next year with a probability of 1 percent?

  What is the company target debt–equity ratio

Fama’s Llamas has a WACC of 10.7 percent. The company’s cost of equity is 14 percent, and its pretax cost of debt is 8.5 percent. The tax rate is 35 percent. What is the company’s target debt–equity ratio?

  What is the capitalized equivalent cost

A manufacturing company is considering a new investment in a machine that will cost $117,000 and has an annual cost of $7,900. There is also an additional overhauling cost of $24,000 for the equipment once every four years. Assuming that this equipme..

  What is value of common equity and intrinsic value per share

Triptych Food Corp FCFs are expected to grow at a constant rate of 4.62% per year in the future. The Market value of Triptych Food Corp's outstanding debt is $54,911 million, and preferred stocks value is $30,506 million. Triptych Food Corp has 450 m..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd