Simon recently received a credit card with a 21% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $387.83. The minimum payment on the card is only $20 per month. a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) b. If Simon makes monthly payments of $65, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) c. How much more in total payments will Simon make under the $20-a-month plan than under the $65-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent. $
Simon recently received a credit card with a 21% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $387.83. The minimum payment on the card is only $20 per month. a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) b. If Simon makes monthly payments of $65, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest whole number. month(s) c. How much more in total payments will Simon make under the $20-a-month plan than under the $65-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent. $
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Simon recently received a credit card with a 21% nominal interest rate. With the card, he purchased an Apple iPhone 7 for $387.83. The minimum payment on the card is only $20 per month.
a. If Simon makes the minimum monthly payment and makes no other charges, how many months will it be before he pays off the card? Do not round intermediate calculations. Round your answer to the nearest whole number.
month(s)
b. If Simon makes monthly payments of $65, how many months will it be before he pays off the debt? Do not round intermediate calculations. Round your answer to the nearest whole number.
month(s)
c. How much more in total payments will Simon make under the $20-a-month plan than under the $65-a-month plan. Do not round intermediate calculations. Round your answer to the nearest cent.
$
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Step 1
Any sum borrowed to meet personal or business funding needs is recognized as a loan. The loan can be repaid with a series of regular periodic payment series. This series is generally considered an annuity. Since the lender charges an interest rate on the loan, the computation of the periodic payment is based on the money's time-worth concept. The concept reveals that any sum of money is worth more currently than what it will be in the future.
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