BUSN 5200 F2 2022: Due to poor spending habits, Ricky has accumulated $10,000 in credit card debt. He has missed several payments and now the annual interest rate on the card is 18.95 percent! If he pays $175 per month on the card, in total, how much interest expense does Ricky pay to the credit card company?
Posted: December 24th, 2022
Due to poor spending habits, Ricky has accumulated $10,000 in credit card debt. He has missed several payments and now the annual interest rate on the card is 18.95 percent! If he pays $175 per month on the card, in total, how much interest expense does Ricky pay to the credit card company?
$12,905.13
$8,714.62
$17,008.52
$15,987.50
Step 1: PV = 10000; PMT = -175; I = 18.95/12; FV = 0; => N = 148.50 Step 2: 148.5 × 175 = 25987.5 – 10000 = 15987.5
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