contestada

Since the card has $0 minimum payments for the first 4 years it is active, Emma wonders how much it will cost her if she
doesn't pay off the $300 balance until after college. How much will she owe in 4 years?
Type the correct response in the box. Use numerals instead of words. Round your answer to the nearest dollar.
In 4 years, Emma will owe about $

Respuesta :

Answer:

$544.61

Step-by-step explanation:

Edmentum

anthougo

In 4 years, Emma will owe about $544.61 to the credit card company.

The model for Emma's debt in 4 years is given as:

FV = P(1+r/n)^nt,

where:

P = principal ($300)

r = the interest rate (15%)

t = the time in years (4 years)

n = the number of times the interest is compounded per year (12)

However, we can solve the problem with an online financial calculator as follows:

Data and Calculations:

N (# of periods) = 48 (4 x 12 months)

I/Y (Interest per year) = 15%

PV (Present Value) = $300

PMT (Periodic Payment) = $0

P/Y (# of periods per year) = 12

C/Y (# of times interest compound per year) = 12

Results:

FV = $544.61

Total Interest = $244.61

Complete Question:

Emma doesn't have experience using credit cards. In fact, she just got her first one. She is also about to start her first year of college. She uses her new credit card to purchase textbooks for her classes. The total comes to $300. These are the terms of her credit card:

  • It has a 15% annual interest rate.
  • The interest is compounded monthly.
  • The card has $0 minimum payments for the first four years it is active.

Thus, in 4 years, Emma will owe $544.61 to the credit card company.

Learn more about determining future value from present value at https://brainly.com/question/24703884

Otras preguntas