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Suppose you owe $3,000 on your credit card. You pay a minimum payment of $30 each month. At an Annual Percentage Rate of 12% (or 1% per month), how many years would it take to eliminate your credit card debt if you made no additional new charges? Less than 5 years Between 5 and 10 years Between 10 and 15 years Never, you will continue to be in debt

Respuesta :

TomShelby

Answer:

Never, you will continue to be in debt

Explanation:

the interest per month are 1% of the unpaid amount:

3,000 x 1% = 30 interest per month

the minimum payment is 30 dollars

Therefore, by doing the minimum payment we are just coering the interest generated per month we are not doing any amortization on the principal Hence we cannot repay the debt.

marvineetesh3

The debt will continue if you owe $3,000 on your credit card. The minimum payment  of $30 each month. At an Annual Percentage Rate of 12%.

Determination of time period to eliminate credit card:

According to the question,

The amount of unpaid Interest on the amount unpaid per month will be 1%. Hence,

[tex]\text{Interest Per Month}= \text{Owed amount}\times\text{Interest per month}.\\\\\text{Interest Per Month}=\$3,000\times\dfrac{1}{100}.\\\\\text{Interest Per Month}=\$30.[/tex]

The minimum payment is 30 dollars.

Therefore, by making the minimal payment we are just meeting the interest returned per month we are not doing any amortization on the principal. Hence, we cannot refund the debt.

SO, the option [D] is correct.

Learn more about credit card, refer:

https://brainly.com/question/1113886

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