Tim has four credit cards with the balances and APRs listed in the chart below. What will Tim's total monthly minimum creditcard payment need to be to pay off all four credit cards in 24 months?Credit CardBalanceAPR$1.260.0012%1896$900.00C $1.290.0016%$1,200.00
a. $118.24
b. $162.62
c. $163.00
d. $221.93
Solving for the future values of the credit card balances:
1260(1 + 0.12/12)^24 = 1599.8656571502122308900(1 + 0.18/12)^24 = 1286.55253073612259711290(1 + 0.09/12)^24 = 1543.37345291648033351200(1 + 0.16/12)^24 = 1649.0625893406018547 Adding the future balances to obtain total bill:
1599.8656571502122308 + 1286.5525307361225971 + 1543.3734529164803335 + 1649.0625893406018547 = 6078.85 Solving for the annuity A (monthly payments for each account):
1599.87 = A [(((1 + 0.12/12)^24) - 1) / (0.12/12)] A = 59.31 1286.55 = A [(((1 + 0.18/12)^24) - 1) / (0.18/12)]A = 44.93 1543.37 = A [(((1 + 0.09/12)^24) - 1) / (0.09/12)]A = 58.93 1649.06 = A [(((1 + 0.16/12)^24) - 1) / (0.16/12)]A = 58.76 Adding the annuities together to obtain the minimum monthly payment:59.31 + 44.93 + 58.93 + 58.76 = 221.93
Therefore, the minimum monthly payment is $221.93. Among the choices, the answer is D.
