RatedrillMonths to clear a credit card
A time value of money problem from Ratedrill. Solve it with one answer box, with fresh numbers on every attempt and the formula, calculator keystrokes and Excel version in the worked answer, and it is checked the moment you submit.
The task
Your credit card balance is $1,600 at 15.75% APR, with interest charged monthly. You stop using the card and pay a fixed $30 on the due date each month. How many months until the balance is gone? Give N to 2 decimals, as a calculator shows it.
What this problem teaches
That is about 7.7 years, and the payments total about $2,770, of which about $1,170 is interest.
A hint if you get stuck
Treat the balance as a loan: solve the annuity present value formula for n with i = APR / 12.
Try it now, free, no account needed
The first 15 tasks on Ratedrill are free. Open it on the practice page, solve it, and get instant feedback with a hint. A free account adds the worked solution; Pro adds timed mode and the certificate.
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