Assume You Owe a Large Balance on Your Credit Card

question 53

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

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Definitions:

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The smallest grammatical unit in a language that carries meaning, such as a root word, prefix, or suffix.

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