1. After 154 minimum payments, Zach would pay $16,691.48 for his $910 of "emergency" purchases on his credit card.
2. The total interest Zach paid to the credit card company is $14,241.48.
Credit card interest is applied using the APR (annual percentage rate).
The APR is applied monthly on the outstanding credit card balance.
For Zach, with an advertised APR of 19%, an interest rate of 1.58% is applied to the outstanding balance and added monthly to the total amount he owed.
N (# of periods) = 154 months
I/Y (Interest per year) = 19%
PV (Present Value) = $910
PMT (Periodic Payment) = $10
Results:
FV = $16,691.48
Sum of all periodic payments = $1,540 ($10 x 154)
Total Interest = $14,241.48
Learn more about credit card interest at https://brainly.com/question/15222470
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Zach, a college freshman, recently signed up for and received his first credit card. The credit card has a 19% annual percentage rate (APR)—that's the interest rate he'll have to pay to use the money he borrows—and it has a minimum payment of only $10 or 2.5% of the balance(whichever is larger). Zach promised himself that he would use the credit card only for emergencies. In the middle of December, Zach had to take off work for a couple of weeks to finish some end-of-semester projects, study for his finals, and spend time at home over the holiday break. Since he won't get a paycheck again until January, he used his credit card for several items he considered emergencies.
