Michael Has Credit Card Debt of $60,000 That Has an 18

question 115

Multiple Choice

Michael has credit card debt of $60,000 that has an 18% APR,compounded monthly.The minimum monthly payment only requires him to pay the interest on his debt.He receives an offer for a credit card with an APR of 10% compounded monthly.If he rolls over his debt onto this card and makes the same monthly payment as before,how long will it take him to pay off his credit card debt?

• A)72 months
• B)78 months
• C)84 months
• D)98 months
• E)104 months

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Definitions:

Marginal Cost

The funding necessary to manufacture an extra unit of a good or service.

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the quantity of output produced.

Market Price

The going rate at which a product or service is available for buying or selling in a particular market.

Pure Competition

A market structure characterized by an extremely high level of competition, where no single buyer or seller has the power to influence prices or market conditions.