Refer to the following for Exercises 31-35, about credit card payments. Many credit cards use a similar formula for the minimum payment, which is the new balance (if less than $25), or else the greatest of $25 or 1% of the new balance (excluding interest and late fees), plus the interest billed, rounded down to the nearest dollar. Any late fees are then added on to this calculated amount. Moreover, when any interest is due, there is a minimum charge of $1.50.

Question 22.65

image 35. (Requires a spreadsheet) Repeat Exercise 34, but for a monthly interest rate of 2.5%.

  1. How many months will it take to pay off a new balance of $5000 by making the minimum payment each month?
  2. How much will you pay altogether?

35.

A-44

(a) 210 months, or 17.5 years. The first payment is $100 with no interest due, the second payment is $172. Hint: With no late charges, we can neglect the provision about 4%. Put the principal in column and the interest due in column . For the interest rounded to the nearest penny, ; for the payment rounded to the nearest dollar, .

(b) $15,524.70