Assume You Owe a Large Balance on Your Credit Card

question 3

Multiple Choice

Assume you owe a large balance on your credit card and only pay the monthly minimum payment equal to 1% of the balance. If the annual interest rate on the credit card is 18%, how many years will it take you to pay off the balance assuming you do not make any additional charges to the card?

• A) 7.8 years
• B) 5 years
• C) You will never pay off the balance.
• D) Not enough information is provided to determine the time.

---

Definitions:

Renault

A multinational automobile manufacturer based in France, known for producing a range of cars and vans, and participating in motor racing.

Nissan

A multinational automobile manufacturer headquartered in Japan, known for its wide range of cars, trucks, and electric vehicles.

Cross-Border Mergers

Transactions where companies from different countries combine their operations or assets, often to expand market reach or leverage strategic advantages.

Direct Foreign Investment

A financial commitment made by a company or individual in one country to business interests in another country, typically via acquiring business assets or establishing business operations.