9
QuizMultiple Choice

Paying Off Debt

Question 9 • [PERFIN] Personal Finance, Sem 2 (26-27)

Michelle has four credit cards with the balances and interest rates listed below. She would like to consolidate all of her credit cards in a single credit card with an interest rate of 16% and pay off the balance in 36 months. If she did so, what would Michelle’s monthly credit card payment be?Credit CardBalanceAPR#1$4,380 17%#2$1,365 19%#3$2,480 23%#4$5,000 15%

Answer
A
$367.36
B
$464.95
C
$685.23
D
$826.56

Explanation

First add the four balances: $4,380 + $1,365 + $2,480 + $5,000 = $13,225. For a 36-month loan at 16% APR, use a monthly rate of 0.16 ÷ 12 and the fixed-payment formula: payment = balance × rate ÷ [1 − (1 + rate)^−36]. This gives a monthly payment of about $464.95, so the correct choice is $464.95.

AI-written and checked against the verified answer.

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