Your credit card has a balance of$4200 and an annual interest rate of 14%. You d
ID: 3321098 • Letter: Y
Question
Your credit card has a balance of$4200 and an annual interest rate of 14%. You decide to pay off the balance over four years. If there are no further purchases charged to the card a. How much must you pay each month? b. How much total interest will you pay? 35. a. The monthly payments are approximately $ (Do not round until the final answer. Then round to the nearest dollar as needed.) b. The total interest paid over 4 years is approximately $ (Use the answer from part a to find this answer. Round to the nearest dollar as needed.)Explanation / Answer
Here we need to calculate EMI as per below mathematical formula
EMI = [P x R x (1+R)^N]/[(1+R)^N-1]
P = 4200
N = 4*12 = 48
R = 0.14/12 = 0.011667
EMI = $114.77
total amount paid = 48*114.77 = 5509.02
Interest paid = 5509.02 - 4200 = 1309.02