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Interest compounded monthly problem

  1. Nov 21, 2009 #1
    Hi again!

    Bob's credit card balance is $2000. Credit company charges 24% interest compounded monthly.

    1) Amortize monthly payments to pay off in 3 years
    I'm not sure how to write the equations on the board, but I get $78.47

    2) If Bob only pays $25 monthly minimum, what will his debt be in 3 years?
    No ideas........
     
  2. jcsd
  3. Nov 21, 2009 #2

    berkeman

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    Staff: Mentor

    Re: [nterest]

    You need to show us the equations you used to work out part 1. We do not do your homework for you here on the PF.

    What are the Relevant Equations for this type of calculation. The Homework Help Template that you deleted in making your post ask for them.
     
  4. Nov 21, 2009 #3
    Re: [nterest]

    I understand, if you see my other post, I AM doing the work myself.

    Here's the equation I used:

    2000(1 + .24/12)^36 = X [(1 + .24/12)^36 - 1] / (.24/12)

    Im not sure what other equations to use for the 2nd problem.

    thanks!
     
  5. Nov 21, 2009 #4

    berkeman

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    Staff: Mentor

    Re: [nterest]

    Yes, I did check your other post after seeing this one. Thanks for posting your work on #1. It seems like #2 is a similar extension of the same technique, but he is just not paying off enough to pay it down. Can you take a cut at an equation for #2?
     
  6. Nov 21, 2009 #5
    Re: [nterest]

    I got it thanks!!

    2000(1 + .24/12)^36 = $4079.77

    25[(1 + .24/12)^36 - 1] / (.24/12) = $1299.86

    Therefore 4079.77 - 1299.86 = $2779.92

    correct?
     
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