15
QuizMultiple Choice

Paying Off Debt

Question 15 • AA - F26 Personal Finance and Economics

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 CardBalanceAPRA$2,380 19%B$4,500 15%C$1,580 17.50%D$900 21%

Answer
A
$390.00
B
$462.91
C
$467.29
D
$52.00

Explanation

Add the four balances to get a total of $9,360. The monthly interest rate is 18% ÷ 12 = 1.5%, and the balance is paid over 24 months. Using the fixed-payment formula, $9,360 × 0.015 ÷ [1 − (1.015)^−24] ≈ $467.29 per month, so the payment is $467.29.

AI-written and checked against the verified answer.

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