You owe $300.00 on your credit card. Each month you fail to make a payment, your balance increases by 2%. How much will you owe after 2 years of missing payments?
P = Po + Po*r*t.
P = 300 + 300*0.02*24mo. =
To find out how much you will owe after 2 years of missing payments, we need to calculate the balance after each month and then add up the balances over the 24 months.
Step 1: Calculate the balance increase for each month.
In the first month, your balance will increase by 2%:
Increase = $300 * 2% = $6
Step 2: Calculate the balance after each month.
Since the balance increases by $6 every month, the balance after the first month will be $300 + $6 = $306.
In the second month, the balance will increase by 2% again:
Increase = $306 * 2% = $6.12
So, the balance after the second month will be $306 + $6.12 = $312.12.
Step 3: Repeat Step 2 for the remaining months.
Perform the same calculation for each month:
Month 3: Increase = $312.12 * 2% = $6.24
Balance after month 3 = $312.12 + $6.24 = $318.36
Continue this calculation for all 24 months.
Step 4: Add up the balances.
After 24 months, you will owe a total of:
$300 + $6 + $306 + $6.12 + $312.12 + $6.24 + ... + balance after month 24
To calculate this sum, you can use the formula for the sum of an arithmetic series:
Sum = (n/2) * (first term + last term)
Where n is the number of terms and the first term is $300.
In this case, n = 24 and the last term is the balance after month 24.
Then, to calculate the balance after month 24, repeat the previous steps and calculate the increase for the 24th month, and add it to the balance after month 23.
Finally, add up all the terms to find the total amount you will owe after 2 years of missing payments.