Paying Off Debt Answers

Jerry has a credit card debt of $15,600 that he would like to reduce by applying $8,500 of his inheritance money to the balance. In addition, he would like to modify his debt payment plan to pay off the remaining balance in 24 months rather than 60 months. His credit card has an APR of 18%. How much will these changes save Jerry in finance charges (interest)?

Alex wants to pay off his credit card balance before he gets married. He decides to take the $2,300 out of his savings and apply it to his credit card debt of $5,390. The credit card has an APR of 16.5%. What will Alex's minimum monthly credit card payment be in order to pay off his debt in 14 months?

Which of the following is not something that will help you pay off credit card debt?

Chuck has a credit card balance of $4,750 with an APR of 17%. With his existing debt payment plan, Chuck will not be able to pay off the debt for another 20 months. To speed up the process, Chuck decides to take $2,000 from his savings and apply it to the balance. He plans to pay the remaining balance in 12 months. How much will Chuck save in finance charges (interest) by doing this?

Billy has a credit card with a current balance of $3,500 and a 16% APR. With his current monthly payment, he will be able to pay off this debt in 15 months. But Billy just learned that he is getting a raise at work. If he puts all of the extra income from his raise into his monthly credit card payment, how much additional monthly income would he require from his raise to pay off the credit card in 12 months?

Which method of debt reduction saves you the most money in interest?

Sarah has a credit card balance of $9,450 with an APR of 17%. With her current budgeted payment, Sarah will be able to pay off this debt in 36 months. But Sarah’s best friend just invited her to spend two months in Europe with her in 9 months. Wanting to have her credit card balance paid off before she goes to Europe, Sarah decides to take on a second job. What additional monthly income will Sarah need in order to pay off her credit card in 9 months?

Kimberly has a credit card with a 19% APR and a balance of $4,350. With her current monthly payment, Kimberly will be able to pay off the credit card in a mere 16 months. But when Kimberly's car breaks down, she is forced to charge an additional $1,600 to her credit card. How much will Kimberly's minimum monthly payment increase if she still wants to pay off her credit card in 16 months?

Frank has four different credit cards, the balances and interest information of which are outlined in the table below. As Frank was developing a debt payment plan, Rick suggested that he pay off the credit cards beginning with the highest interest rate, working his way down. If Frank chooses to follow Rick’s advice, in what order should Frank plan on paying off his credit cards?Credit CardBalanceAPRA$2,380 19%B$4,500 15%C$1,580 17.50%D$900 21%

Michelle has four credit cards with the balances and interest rates listed below. If Michelle wanted to pay off all four credit cards in 36 months, what would her total monthly credit card payment be?Credit CardBalanceAPR#1$4,380 17%#2$1,365 19%#3$2,480 23%#4$5,000 15%

Michelle has four credit cards with the balances and interest rates listed below. She would like to consolidate all of her credit cards in a single credit card with an interest rate of 16% and pay off the balance in 36 months. If she did so, what would Michelle’s monthly credit card payment be?Credit CardBalanceAPR#1$4,380 17%#2$1,365 19%#3$2,480 23%#4$5,000 15%

Which of the following is not a step in creating a debt payment plan?

Michelle has four credit cards with the balances and interest rates listed below. She wants to pay off her credit cards one at a time, based on the interest rate. In which order should Michelle pay off her credit cards?Credit CardBalanceAPR#1$4,380 17%#2$1,365 19%#3$2,480 23%#4$5,000 15%