You have a credit card with a balance of $ 1 , 367.90 at a 9.5 % apr. You pay $ 400.00 each month on the due date until the card is paid off. How many months does it take to pay off the card, and what is the total amount paid including interest?
To find the number of months it takes to pay off the credit card balance, we need to divide the original balance by the monthly payment amount.
Number of months = Credit card balance / Monthly payment
Number of months = $1,367.90 / $400.00
Number of months ≈ 3.42
Since the number of months cannot be a decimal, we round up to the nearest whole number. Therefore, it takes approximately 4 months to pay off the card.
Next, we calculate the total amount paid including interest. To do this, we need to calculate the interest paid per month and then multiply it by the number of months.
Interest per month = (APR / 12) * Credit card balance
Interest per month = (9.5% / 12) * $1,367.90 ≈ $10.12
Total interest paid = Interest per month * Number of months
Total interest paid = $10.12 * 4 ≈ $40.48
Finally, we calculate the total amount paid, which is the original balance plus the total interest paid.
Total amount paid = Credit card balance + Total interest paid
Total amount paid = $1,367.90 + $40.48 ≈ $1,408.38
Therefore, it takes approximately 4 months to pay off the card, and the total amount paid including interest is approximately $1,408.38.