Answered

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OK SO I NEED HELP WITH THIS:

My cousin Throckmorton is in a bind. He owes $10000 on a credit card. He can only afford to make $250 payments every month. Unfortunately, since he missed an earlier payment, he is now stuck with the penalty APR of 28%..


Throckmorton makes his payments on time for the next two years.


g) How much total did throckmorteon pay towards his credit card?

h) How much does Throckmorton still owe on the credit card?

i) How much of his money went towards interest?


Hint: i would make a chart.
i barley started on the chart so i dont know what to do

OK SO I NEED HELP WITH THIS My Cousin Throckmorton Is In A Bind He Owes 10000 On A Credit Card He Can Only Afford To Make 250 Payments Every Month Unfortunately class=

Sagot :

sqdancefan

9514 1404 393

Answer:

  g) $6000 ($528.18 to principal)

  h) $9,471.82

  i) $5471.82

Step-by-step explanation:

You can make a chart, as you have started. Such a chart is often referred to as an amortization schedule. The basic idea would be to show how each payment is distributed to interest and principal. The attached shows such a spreadsheet (with a few rows hidden). It is described in more detail below.

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g) The total amount paid is 24 payments of $250 each, so $6000. These payments reduced his amount owed by $528.18. (We don't know if "toward his credit card" means "to the creditor" or "to pay his debt".)

__

h) The amount still owed is $9,471.82 (the ending balance after the 24th payment)

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i) $5,471.82 went toward interest.

_____

Spreadsheet details

The first "Beg Bal" is the $10,000 owed. Each one after that is copied from the "New Bal" cell on the previous line.

Each "to interest" quantity is the product of the beginning balance and the monthly interest rate. The cell reference to the interest rate needs to be an absolute reference, so it remains the same when copying the formula to other cells.

The "to Principal" amount is the difference between the payment amount and the amount "to interest." The reference to the payment amount cell also must be an absolute reference.

The "End Bal" amount is the difference between the "Beg Bal" and the amount "to Principal".

As you can see, the payment math is not difficult. There is one multiplication (by the interest rate) and the rest is subtraction.

Note that the numbers in this spreadsheet are rounded by the display. In a real payment situation, the interest due amount would be rounded to the penny before being used in other calculations. The way we have done it will result in a few cents difference in the ending balance from the value if the interest were actually rounded at each step.

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