Your credit card charges 12% APR and your current balance is $2,200. Calculate the following amounts. Round your answers to two decimal places.

A) If you want to pay off the credit card in 5 years, how much will you need to pay each month, assuming you don't charge anything new to the card?

$ each month

B) How much total interest do you pay?

$ total interest

We can solve this using the formula for calculating the monthly payment for an amortized loan. The formula is:

\[
M = P \times \frac{r(1+r)^n}{(1+r)^n - 1}
\]

Where:
- $M$ is the monthly payment.
- $P$ is the loan amount (or current balance), which is $2,200.
- $r$ is the monthly interest rate (which is the annual interest rate divided by 12). In this case, the APR is 12%, so the monthly interest rate is $\frac{12\%}{12} = 1\% = 0.01$.
- $n$ is the total number of payments (which is 5 years × 12 months = 60 months).

Let's calculate the monthly payment first, and then the total interest.

### A) Monthly Payment Calculation

\[
M = 2200 \times \frac{0.01(1 + 0.01)^{60}}{(1 + 0.01)^{60} - 1}
\]

I'll calculate this step by step.It seems there was a timeout issue during the calculation. I’ll walk you through the solution manually.

### A) Monthly Payment Calculation
We have the formula:

\[
M = 2200 \times \frac{0.01(1 + 0.01)^{60}}{(1 + 0.01)^{60} - 1}
\]

Breaking it down:
1. $ 1 + 0.01 = 1.01 $
2. $ 1.01^{60} = 1.8167 $ (approximately)
3. The numerator becomes $ 0.01 \times 1.8167 = 0.018167 $
4. The denominator becomes $ 1.8167 - 1 = 0.8167 $

Thus, the payment is:

\[
M = 2200 \times \frac{0.018167}{0.8167} = 2200 \times 0.02224 = 48.93
\]

So, the monthly payment is approximately **$48.93**.

### B) Total Interest Calculation
To find the total interest, we first calculate the total amount paid over the 5 years:

\[
\text{Total Paid} = 48.93 \times 60 = 2935.8
\]

Now, subtract the original balance from the total paid:

\[
\text{Total Interest} = 2935.8 - 2200 = 735.8
\]

Thus, the total interest paid is **$735.80**.

---

Would you like any further details, or do you have any questions?

Here are five related questions to consider:
1. What if the APR was 15% instead of 12%? How would the monthly payment change?
2. How much would you save in interest if you paid off the balance in 3 years instead of 5?
3. What happens to the total interest if you pay more than the minimum each month?
4. How is the interest calculated on a daily basis for credit cards?
5. If you charged an additional $500 to the card, how would it affect your payments?

**Tip:** Making extra payments reduces the principal faster, which saves money on interest in the long run.

Your credit card charges 12% APR and your current balance is $2,200. Calculate the following amounts. Round your answers to two decimal places.

A) If you want to pay off the credit card in 5 years, how much will you need to pay each month, assuming you don't charge anything new to the card?

B) How much total interest do you pay?

Learn how to calculate your monthly payment and total interest for a $2,200 credit card balance at 12% APR over 5 years. This problem uses the loan amortization formula to provide a step-by-step solution, suitable for Grades 10-12.

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