Frank has four different credit cards, the balances and interest information of which are outlined in the table below. He would like to consolidate his credit cards to a single credit card with an APR of 18% and pay off the balance in 24 months. What will his monthly credit card payment be? Credit Card Balance APR A $2,380 19% B $4,500 15% C $1,580 17.50% D $900 21% a. $390.00 b. $462.91 c. $467.29 d. $52.00
Accepted Solution
A:
Answer: c. $467.29Step-by-step explanation:The total of balances is $9360. The payment can be computed using the amortization formula: A = P(r/12)/(1 -(1 +r/12)^-n)where A is the monthly payment, P is the principal (total balance), r is the annual rate, and n is the number of months.Filling in your numbers, we have ... A = $9360(0.18/12)/(1 -(1 +0.18/12)^-24) ≈ $467.29Frank's monthly credit card payment will be $467.29.