3 You realize that you have a 5000 balance on your credit ca

3. You realize that you have a $5000 balance on your credit card, which is being assessed 18% yearly interest. If you cut the credit card up and make $100 payments every month on it, how many years until you’ve paid it off?

Balance on credit card = $ 5,000

Interest rate = 18 % p.a. or 0.18/12 = 0.015 p.m.

Monthly interest amount = 0.15 x $ 5,000 = $ 75

Amount goes to principal = $ 100 - $ 75 = $ 25

Amortization schedule:

Month

Total Principal (P)

Interest(I)

Principal Paid (p = P - I)

Balance Principal

(P - p)

5000.00

75.00

25.00

4975.00

74.63

25.38

4949.63

74.24

25.76

4923.87

73.86

26.14

4897.73

73.47

26.53

4871.19

73.07

26.93

4844.26

72.66

27.34

4816.93

72.25

27.75

4789.18

71.84

28.16

4761.02

71.42

28.58

4732.43

70.99

29.01

4703.42

70.55

29.45

4673.97

70.11

29.89

4644.08

69.66

30.34

4613.74

69.21

30.79

4582.95

68.74

31.26

4551.69

68.28

31.72

4519.97

67.80

32.20

4487.77

67.32

32.68

4455.08

66.83

33.17

4421.91

66.33

33.67

4388.24

65.82

34.18

4354.06

65.31

34.69

4319.37

64.79

35.21

4284.16

64.26

35.74

4248.42

63.73

36.27

4212.15

63.18

36.82

4175.33

62.63

37.37

4137.96

62.07

37.93

4100.03

61.50

38.50

4061.53

60.92

39.08

4022.46

60.34

39.66

3982.79

59.74

40.26

3942.53

59.14

40.86

3901.67

58.53

41.47

3860.20

57.90

42.10

3818.10

57.27

42.73

3775.37

56.63

43.37

3732.00

55.98

44.02

3687.98

55.32

44.68

3643.30

54.65

45.35

3597.95

53.97

46.03

3551.92

53.28

46.72

3505.20

52.58

47.42

3457.78

51.87

48.13

3409.64

51.14

48.86

3360.79

50.41

49.59

3311.20

49.67

50.33

3260.87

48.91

51.09

3209.78

48.15

51.85

3157.93

47.37

52.63

3105.30

46.58

53.42

3051.88

45.78

54.22

2997.66

44.96

55.04

2942.62

44.14

55.86

2886.76

43.30

56.70

2830.06

42.45

57.55

2772.51

41.59

58.41

2714.10

40.71

59.29

2654.81

39.82

60.18

2594.63

38.92

61.08

2533.55

38.00

62.00

2471.56

37.07

62.93

2408.63

36.13

63.87

2344.76

35.17

64.83

2279.93

34.20

65.80

2214.13

33.21

66.79

2147.34

32.21

67.79

2079.55

31.19

68.81

2010.75

30.16

69.84

1940.91

29.11

70.89

1870.02

28.05

71.95

1798.07

26.97

73.03

1725.04

25.88

74.12

1650.92

24.76

75.24

1575.68

23.64

76.36

1499.32

22.49

77.51

1421.81

21.33

78.67

1343.13

20.15

79.85

1263.28

18.95

81.05

1182.23

17.73

82.27

1099.96

16.50

83.50

1016.46

15.25

84.75

931.71

13.98

86.02

845.68

12.69

87.31

758.37

11.38

88.62

669.74

10.05

89.95

579.79

8.70

91.30

488.49

7.33

92.67

395.82

5.94

94.06

301.75

4.53

95.47

206.28

3.09

96.91

109.37

1.64

98.36

11.01

0.17

99.83

-88.82

Hence it will take 94 months or 94/12 = 7.8 years to pay off the loan.

Month	Total Principal (P)	Interest(I)	Principal Paid (p = P - I)	Balance Principal (P - p)
1	5000.00	75.00	25.00	4975.00
2	4975.00	74.63	25.38	4949.63
3	4949.63	74.24	25.76	4923.87
4	4923.87	73.86	26.14	4897.73
5	4897.73	73.47	26.53	4871.19
6	4871.19	73.07	26.93	4844.26
7	4844.26	72.66	27.34	4816.93
8	4816.93	72.25	27.75	4789.18
9	4789.18	71.84	28.16	4761.02
10	4761.02	71.42	28.58	4732.43
11	4732.43	70.99	29.01	4703.42
12	4703.42	70.55	29.45	4673.97
13	4673.97	70.11	29.89	4644.08
14	4644.08	69.66	30.34	4613.74
15	4613.74	69.21	30.79	4582.95
16	4582.95	68.74	31.26	4551.69
17	4551.69	68.28	31.72	4519.97
18	4519.97	67.80	32.20	4487.77
19	4487.77	67.32	32.68	4455.08
20	4455.08	66.83	33.17	4421.91
21	4421.91	66.33	33.67	4388.24
22	4388.24	65.82	34.18	4354.06
23	4354.06	65.31	34.69	4319.37
24	4319.37	64.79	35.21	4284.16
25	4284.16	64.26	35.74	4248.42
26	4248.42	63.73	36.27	4212.15
27	4212.15	63.18	36.82	4175.33
28	4175.33	62.63	37.37	4137.96
29	4137.96	62.07	37.93	4100.03
30	4100.03	61.50	38.50	4061.53
31	4061.53	60.92	39.08	4022.46
32	4022.46	60.34	39.66	3982.79
33	3982.79	59.74	40.26	3942.53
34	3942.53	59.14	40.86	3901.67
35	3901.67	58.53	41.47	3860.20
36	3860.20	57.90	42.10	3818.10
37	3818.10	57.27	42.73	3775.37
38	3775.37	56.63	43.37	3732.00
39	3732.00	55.98	44.02	3687.98
40	3687.98	55.32	44.68	3643.30
41	3643.30	54.65	45.35	3597.95
42	3597.95	53.97	46.03	3551.92
43	3551.92	53.28	46.72	3505.20
44	3505.20	52.58	47.42	3457.78
45	3457.78	51.87	48.13	3409.64
46	3409.64	51.14	48.86	3360.79
47	3360.79	50.41	49.59	3311.20
48	3311.20	49.67	50.33	3260.87
49	3260.87	48.91	51.09	3209.78
50	3209.78	48.15	51.85	3157.93
51	3157.93	47.37	52.63	3105.30
52	3105.30	46.58	53.42	3051.88
53	3051.88	45.78	54.22	2997.66
54	2997.66	44.96	55.04	2942.62
55	2942.62	44.14	55.86	2886.76
56	2886.76	43.30	56.70	2830.06
57	2830.06	42.45	57.55	2772.51
58	2772.51	41.59	58.41	2714.10
59	2714.10	40.71	59.29	2654.81
60	2654.81	39.82	60.18	2594.63
61	2594.63	38.92	61.08	2533.55
62	2533.55	38.00	62.00	2471.56
63	2471.56	37.07	62.93	2408.63
64	2408.63	36.13	63.87	2344.76
65	2344.76	35.17	64.83	2279.93
66	2279.93	34.20	65.80	2214.13
67	2214.13	33.21	66.79	2147.34
68	2147.34	32.21	67.79	2079.55
69	2079.55	31.19	68.81	2010.75
70	2010.75	30.16	69.84	1940.91
71	1940.91	29.11	70.89	1870.02
72	1870.02	28.05	71.95	1798.07
73	1798.07	26.97	73.03	1725.04
74	1725.04	25.88	74.12	1650.92
75	1650.92	24.76	75.24	1575.68
76	1575.68	23.64	76.36	1499.32
77	1499.32	22.49	77.51	1421.81
78	1421.81	21.33	78.67	1343.13
79	1343.13	20.15	79.85	1263.28
80	1263.28	18.95	81.05	1182.23
81	1182.23	17.73	82.27	1099.96
82	1099.96	16.50	83.50	1016.46
83	1016.46	15.25	84.75	931.71
84	931.71	13.98	86.02	845.68
85	845.68	12.69	87.31	758.37
86	758.37	11.38	88.62	669.74
87	669.74	10.05	89.95	579.79
88	579.79	8.70	91.30	488.49
89	488.49	7.33	92.67	395.82
90	395.82	5.94	94.06	301.75
91	301.75	4.53	95.47	206.28
92	206.28	3.09	96.91	109.37
93	109.37	1.64	98.36	11.01
94	11.01	0.17	99.83	-88.82

3. You realize that you have a $5000 balance on your credit card, which is being assessed 18% yearly interest. If you cut the credit card up and make $100 payme

3 You realize that you have a 5000 balance on your credit ca

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