How much money would you need to have in savings account

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Reference no: EM131999387

You obtain a new credit card that has an 18% APR compounded monthly.

a) You accumulate $200 per month on the credit card for the next 24 months (starting at t=1) without making any payments. How much debt do you owe in 24 months?

b) Suppose your savings account offers a 5% APR compounded quarterly. If you were to pay off the entire credit card debt in 24 months using what is in your savings account in 24 months, how much money would you need to have in your savings account right now?

Please show me the complete process of dealing with these questions.

Reference no: EM131999387

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