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.
The total cost of repaying the loan to the nearest dollar is $___
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To determine the total cost of repaying the loan, we can use the formula for calculating the total cost of a loan:
Total Cost = Loan Amount + Interest
Loan Amount = $750
Interest Rate = 17.99% = 17.99/100 = 0.1799
Number of compounding periods per year = 12 (since interest is compounded monthly)
Number of years = 9 months / 12 months = 0.75
Monthly interest rate = Interest Rate / Number of compounding periods per year = 0.1799 / 12 = 0.014995
Fixed monthly payment = $?
Using the loan calculator, we can determine the fixed monthly payment required to repay the loan.
Let's assume the fixed monthly payment is $P.
According to the loan calculator, the loan amount is $750, the interest rate is 0.1799, the number of years is 0.75, and the monthly payment is $P.
After entering these values into the loan calculator, we obtain the following equation:
750 = P(1 - (1 + 0.014995)^(-0.75))/0.014995
Solving this equation, we find that P ≈ $91.25.
Now, we can calculate the total cost of repaying the loan using this fixed monthly payment.
Total Cost = Loan Amount + Interest
Total Cost = $750 + ($91.25 * 9) = $750 + $821.25 = $1,571.25
Therefore, the total cost of repaying the $750 credit card loan over a period of 9 months with a 17.99% interest rate compounded monthly and a fixed monthly payment is approximately $1,571.25 when rounded to the nearest dollar.
Apologies for the confusion. I made a mistake in my previous response. Let's recalculate the total cost of repaying the loan correctly.
Loan Amount = $750
Interest Rate = 17.99% = 17.99/100 = 0.1799
Number of months = 9
Fixed monthly payment = $?
Using the loan calculator, we can determine the fixed monthly payment required to repay the loan.
Let's assume the fixed monthly payment is $P.
According to the loan calculator, the loan amount is $750, the interest rate is 0.1799, the number of months is 9, and the monthly payment is $P.
After entering these values into the loan calculator, we obtain the following equation:
750 = P(1 - (1 + 0.1799)^(-9))/0.1799
Solving this equation, we find that P ≈ $98.77.
Now, we can calculate the total cost of repaying the loan using this fixed monthly payment.
Total Cost = Loan Amount + Interest
Total Cost = $750 + ($98.77 * 9) = $750 + $888.93 = $1,638.93
Therefore, the total cost of repaying the $750 credit card loan over a period of 9 months with a 17.99% interest rate compounded monthly and a fixed monthly payment is approximately $1,638.93 when rounded to the nearest dollar.