Interest rates on credit cards can range between 7% and 36%.Each month, credit card compan
Interest rates on credit cards can range between 7% and 36%.Each month, credit card companies calculate the minimum payment ofa credit card based on the current Math 104, Spring 2016 2 balanceon the card (for instance, some credit cards require you to pay 3%of the current balance each month).
Cara recently made a $800 purchase with her credit card to buy alaptop. Her credit card has a 20% interest rate, compoundedmonthly. Cara decides she will pay $25 a month (this is bit higherthan the minimum payment)
(a) How long will it take Cara to pay off the balance on hercredit card? Round your answer to the next month.
(b) Using your answer from (a), approximately how much will shehave pay in interest?
(c) How do (a) and (b) change if Cara instead makes monthlypayments of $50?