You currently owe $2851 to your credit card that charges an annual interest rate of 22%

Finance Oct 06, 2020

You currently owe $2851 to your credit card that charges an annual interest rate of 22%. You make $128 of new charges every month and make a payment of $205 every month. What will the credit card balance be in 3 months?

Expert Solution

Computation of Credit Balance in 3 Months using FV Function in Excel:

=fv(rate,nper,pmt,pv,type)

Here,

FV = Credit Balance in 3 months or Future Value = ?

Rate = 22%/12 = 1.83%

Nper = 3 months

PMT = $128-$205 = -$77

PV = -$2,851

Type = 0

Substituting the values in formula:

=fv(1.83%,3,-77,-2851,0)

FV or Future Value = $3,245.65

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote