Question

Assume that you have a balance of $2900 on your MasterCard and that you make no more charges. Assume that MasterCard charges 12% APR and that each month you make only the minimum payment of 6% of the balance. What will the balance be after 24 months? (Round your answer to the nearest cent.)

( Mind you, It is not 846 )

Answer 1

interest in each month = opening balance * (APR / 12)

We divide by 12 as we are calculating interest for 1 month

Payment in each month = (opening balance + interest for the month) * 6%

closing balance of each month = opening balance + interest - payment

Balance after 24 months = $834.03

3 Opening closing 1 Month balance interest payment balance 2 1 $ 2,900.00 $ 29.00 $ 175.74 5 2,753.26 2 $ 2,753.26 $ 27.53 $ 16685 2,613.95 3 $ 2,613.95 $26.14 $ 158.41 $ 2,481.68 4 $ 2,481.68 $ 24.82 $ 150.39 $ 2,356.11 6 5 $ 2,356.11 5 23.56 $ 142.78 $ 2,236.89 6 $ 2,236.89 $ 22.37 $ 135.56 $ 2,123.70 8 7 $ 2,123.70 5 21.24 $ 128.70 $ 2,016.24 8 $ 2,016.24 $ 20.16 $ 122.18 $ 1,914.22 10 9 $ 1,914.22 $ 19.14 $ 116.00 $ 1,817.36 11 10 $ 1,817.36 $ 18.17 $ 110.13 $ 1,725.40 11 $ 1,725.40 $ 17.25 $ 104.56 $ 1,638.10 12 $ 1,638.10 $ 16.38 $ 99.27 $ 1,555.21 14 13 $ 1,555.21 $ 15.55 $ 94.25 $ 1,476.52 14 $ 1,476.52 $ 14.77 $ 89.48 $ 1,401.80 15 $ 1,401.80 $ 14.02 $ 84.95 $ 1,330.87 16 $ 1,330.87 $ 13.31 $ 80.65 5 1,263.53 17 $ 1,263.53 $ 12.64 $ 76.57 $ 1,199.60 18 $ 1,199.60 $ 12.00 5 72.70 5 1,138.90 19 $ 1,138.90 $ 11.39 $ 69.02 $ 1,081.27 20 $ 1,081.27 $ 10.815 65.52 $ 1,026.56 21 $ 1,026.56 $ 10.27 $ 62.21 $ 974.61 22 5 974.61 $ 9.75 $ 59.06 5 925.30 23 S 925.30 $ 9.25 $ 56.07 $ 878.48 24 S 878.48 $ 8.78 $ 53.24 $ 834.03 12 13 15 16 17 18

Opening 1 Month balance 2900 interest =B2.12%/12 =B3 12%/12 =B4.12%/12 =B5.12%/12 =B6 12%/12 =B7*12%/12 =B8*12%/12 =B9.12%/12 =B10*12%/12 =B1112%/12 =B12*12%/12 =B13*12%/12 =B14*12%/12 =B15 12%/12 =B16*12%/12 =B17.129/12 =B18*12%/12 =B19-12%/12 =B20*12%/12 =B21.12%/12 =B2212%/12 =B23-12%/12 =B2412%/12 =B25 12%/12 payment =(B2-C2)*6% =(B3+C3)*6% =(B4+C4)*6% =(B5+C5)*6% = (B6+C6)* 6% = (B7+C7)*6% = (B8+C8)* 6% =(B9+09)*6% = (B10+C10)* 6% =(B11+C11)*6% =(B12+C12)*6% =(B13+C13)*6% =(B14+C14)*6% =(B15+C15)*6% =(B16+C16)*6% =(B17C17)*6% =(B18-C18)*6% =B19-C19)*6% =(B20+C20)*6% =(B21-C21)*6% =(B22-C22)*6% =(B23-C23)*6% =(B24-C24)*6% =(B25+C25)*6% closing balance =B2+C2-D2 =B3+C3-D3 =B4+C4-04 =B5+C5-D5 =B6+C6-D6 =B7-07-07 =B8+C8-D8 =B9+09-09 =B10+C10-D10 =B11+C11-011 =B12+C12-D12 =B13+C13-D13 =B14+C14-014 =B15+C15-D15 =B16+C16-016 =B17+C17-D17 =B18+C18-D18 -819-C19-019 =B20+C20-D20 =B21-C21-D21 =B22-C22-D22 =B23-C23-D23 =B24+C24-D24 =B25+C25-D25 -E14 -E16 =E17 =E18 =E19 =E20 =E21 =E22 -E23 -E24