Ashley has a balance of $4,000 on her credit card with an annual interest rate of 13%. To pay off the $4,000 in three years, Ashley will hav

Question

Ashley has a balance of $4,000 on her credit card with an annual interest rate of 13%. To pay off the $4,000 in three years, Ashley will have to make a minimum payment of $134.78 per month. To pay off the $4,000 in five years, Ashley will have to make a minimum payment of $91.01 per month. How much more interest will Ashley pay when the length of the loan changes from 3 years to 5 years?

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Julia 2 weeks 2021-10-12T13:01:53+00:00 1 Answer 0

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    2021-10-12T13:03:09+00:00

    Answer:

      $608.52

    Step-by-step explanation:

    Ashley’s payment total for 3 years is …

       (36 months) × (134.78/month) = $4852.08

    Her total for 5 years is …

      (60 months) × (91.01/month) = $5460.60

    The difference in these is the difference in interest cost:

      $5460.60 -4852.08 = $608.52

    When the loan is 5 years, Ashley pays $608.52 more interest.

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