Anthony H.

asked • 11/12/15

Math help with Percentages and APR

Your credit card has an annual percentage rate (APR) of 24% and a minimum payment of $10.00. If you make the minimum payment every month, use the table below to determine how long it will take to pay off your purchase…..

Month       Balance      Payment       Remaining Balance            Interest            New Balance
 
1              $82.85

2

3

4

5

6

7

8

9

10
 
 
 
( The total amount being charged is 82.85 from the previous question. I am suppose to figure out by which month I will pay off the amount, I started it on my own and believe It would take 8 months. I am not completely sure if someone can help me please!!) and also the last question is…… 
 
 
" How much do you end up paying for your purchase if you use your credit card?"

1 Expert Answer

By:

Tim E. answered • 11/12/15

Tutor
5.0 (43)

Comm. College & High School Math, Physics - retired Aerospace Engr

Anthony H.

For the second row wouldn't  NEW BAL be 65.60??
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11/12/15

Tim E.

I created this table in EXCEL, each cell operated on the numbers with longer (or more) precision, then only displayed the truncated number. It very well could be a one cent diff is the result of "round off", and it operates on (such as mult by an interest rate) the value rounded to the nearest cent.  I doubt they would ding your answer either way. 
For instance, here's the table to 4 places of precision. (and of course, a bill is never to something smaller than 0.01)
 
 BAL        PAYMT   REM       INT       NEW BAL
82.8500 10.0000  72.8500  1.4570  74.3070
74.3070 10.0000  64.3070  1.2861  65.5931
65.5931 10.0000  55.5931  1.1119  56.7050
56.7050 10.0000  46.7050  0.9341  47.6391
47.6391 10.0000  37.6391  0.7528  38.3919
38.3919 10.0000  28.3919  0.5678  28.9597
28.9597 10.0000  18.9597  0.3792  19.3389
19.3389 10.0000   9.3389   0.1868   9.5257
 9.5257   9.5257
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11/12/15

Tim E.

(you may get this twice, because when I hit save it didn't show up)
The difference of 0.01 is round off.  I put in the table from an EXCEL spreadsheet, where the numbers added, subtracted and multiplied have a higher precision than 2 places (or 0.01). I only displayed them in two decimal places (cents).  I don't think the number precision will be a problem, because I don't know if in banking the intermediate calculations are each rounded to two places or not (??). (Although, we know we never are billed for an amount with precision less than 0.01). I wouldn't worry about the 0.01 diff. 
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11/12/15

Tim E.

by the way, here's the same table displaying a 4 digit decimal (format change in EXCEL)
BAL        PAYMT   REM      INT     NEW BAL
82.8500 10.0000 72.8500 1.4570 74.3070
74.3070 10.0000 64.3070 1.2861 65.5931
65.5931 10.0000 55.5931 1.1119 56.7050
56.7050 10.0000 46.7050 0.9341 47.6391
47.6391 10.0000 37.6391 0.7528 38.3919
38.3919 10.0000 28.3919 0.5678 28.9597
28.9597 10.0000 18.9597 0.3792 19.3389
19.3389 10.0000  9.3389  0.1868  9.5257
  9.5257  9.53
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11/12/15

Tim E.

Didn't see your last question.  but the TOTAL AMOUNT PAID = $89.53  (sum of 2nd column)
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11/12/15

Anthony H.

That is what I got too, thank you!!
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11/12/15

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