Using an online loan calculator, determine the total cost of repaying a $750 credit card loan with a 17.99% interest rate compounded monthly and a fixed monthly payment over a period of 9 months. Round the answer to the nearest dollar.(1 point)
The total cost of repaying the loan to the nearest dollar is $
To determine the total cost of repaying the loan, we can use the formula for calculating the total cost of a loan:
Total Cost = Monthly Payment * Number of Payments
First, we need to calculate the monthly payment. To do this, we can use the formula for calculating the fixed monthly payment on a loan:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1+Monthly Interest Rate)^-Number of Payments)
The Loan Amount is $750, the Annual Interest Rate is 17.99% or 0.1799, the Monthly Interest Rate is 0.1799/12, and the Number of Payments is 9.
Monthly Interest Rate = 0.1799/12 = 0.01499167
Number of Payments = 9
Plugging these values into the formula, we get:
Monthly Payment = (750 * 0.01499167) / (1 - (1+0.01499167)^-9)
= 11.24288219
Rounding the Monthly Payment to the nearest dollar, we get $11.
Now we can calculate the Total Cost:
Total Cost = Monthly Payment * Number of Payments
= 11 * 9
= 99
Therefore, the total cost of repaying the loan to the nearest dollar is $99.