Suppose you make a single large purchase of 1200 on a credit

Suppose you make a single large purchase of $1.200 on a credit card with an interest rate of 1.15% per month, and the minimum payment for any month is the amount of interest plus 1% of the principal balance If you don t make any more purchases on that card and make the minimum payment for one year, how much will you pay down

Solution

From the given data credit card balance : $1200

interest rate is : 1.15%

Payment amount per month is given by : 1200 - one percent of the principle balance

= 1200 - 1063.68

= 136.32

Pay off credit card is = 9 months