Your credit card charges 16% APR and your current balance is $9,400. Calculate the following amounts. Round your answers to two decimal places.

A) If you want to pay off the credit card in 3 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?

$ 

To solve this, we can use the formula for the monthly payment on an amortized loan:

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

Where:
- $M$ is the monthly payment.
- $P$ is the principal (current balance), which is \$9,400.
- $r$ is the monthly interest rate, which is the annual interest rate divided by 12.
- $n$ is the total number of payments (number of months over 3 years, so 36 months).

The annual interest rate (APR) is 16%, so the monthly interest rate is:

\[
r = \frac{16\%}{12} = 0.01333
\]

Now, I'll calculate the monthly payment and the total interest paid.A) The monthly payment needed to pay off the credit card in 3 years is **$330.48**.

B) The total interest you will pay over the 3 years is **$2,497.14**.

Would you like more details or have any questions?

Here are five related questions:
1. How would the monthly payment change if the APR increased to 20%?
2. What would the total interest be if you paid off the balance in 2 years instead of 3?
3. How much interest would you save if you made a one-time extra payment of $1,000?
4. What is the effect of reducing the balance by paying double for one month?
5. How does the APR affect the time to pay off the credit card?

**Tip:** Paying more than the minimum monthly payment can help you reduce the total interest paid.

Your credit card charges 16% APR and your current balance is $9,400. Calculate the following amounts. Round your answers to two decimal places.

A) If you want to pay off the credit card in 3 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?

Calculate the monthly payment and total interest for a $9,400 credit card balance with a 16% APR, to be paid off in 3 years. Learn about loan amortization and interest rate formulas. Suitable for Grades 11-12.

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