Question

Zane has an outstanding credit card balance of $2,000. His credit card has an APR of 9.99% and he would like to have a zero balance one year from now. How much should he pay each month to reach this goal

Answer 1

Answer:

$175.82

Explanation:

in order to calculate the monthly payment we have to use the present value formula.

PV = monthly payment x PV annuity factor

monthly payment = PV / PV annuity factor

• PV = $2,000
• PV annuity factor, 0.832%, 12 periods = 11.37527

monthly payment = $2,000 / 11.37527 = $175.8200025 = $175.82

Answer 2

The amount of money that should be paid each month for reaching the goal is $175.82.

Calculation of the monthly payment:

Since Zane has an outstanding credit card balance of $2,000. His credit card has an APR of 9.99%

So, here the following formula should be used

monthly payment = PV / PV annuity factor

= $2,000 / 11.37527

= $175.8200025

= $175.82

hence, The amount of money that should be paid each month for reaching the goal is $175.82.

Learn more about credit card here: https://brainly.com/question/18841332