We are using the mathematica program for solving when needed

We are using the mathematica program for solving when needed. Thanks in advance for your help.

Your current credit card balance is $12,000 with a current rate of 19.9% per year. Interest is charged monthly. Determine what monthly payment p will pay off the card in Two years, assuming no new charges Four years, assuming no new charges

Solution

a.)

Let monthly payment be p.

Monthly interest=19.9/12=1.66%

The formula:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

Here R=0.0166

N=24

P=12000

EMI = [12000 x 0.0166 x (1+0.0166)^24]/[(1+0.0166)^24-1]=$610.28

b.)

Here N=48

So EMI=(12000*0.0166*(1+0.0166)^48)/((1+0.0166)^48-1)=$364.65