Answers26-27 Ignite Technical Math-Financial Math - MA2007Credit vs. CashQuestion 7
7
QuizMultiple Choice

Credit vs. Cash

Question 7 • 26-27 Ignite Technical Math-Financial Math - MA2007

As a New Year's resolution, Jimmy has agreed to pay off his 4 credit cards and completely eliminate his credit card debt within the next 12 months. Listed below are the balances and annual percentage rates for Jimmy's credit cards. In order to pay his credit card debt off in the next 12 months, what will Jimmy's total minimum credit card payment be? Credit CardCurrent BalanceAPRA$563.0016%B$2,525.0021%C$972.0019%D$389.0017%

Answer
A
$321.83
B
$361.45
C
$374.65
D
$411.25

Explanation

To eliminate each balance in 12 monthly payments, calculate the monthly payment using the card’s monthly rate (APR ÷ 12) and a 12-month payoff period. The estimated payments are $51.06 for A, $235.13 for B, $89.59 for C, and $35.48 for D. Together they total about $411.26, which rounds to $411.25; the correct choice is $411.25.

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