Number of Annuity Payments Joey Realizes That He Has Charged

question 96

Multiple Choice

Number of Annuity Payments Joey realizes that he has charged too much on his credit card and has racked up $4,000 in debt.If he can pay $200 each month and the card charges percent 20 APR (compounded monthly) ,how long will it take him to pay off the debt?

• A)17.40 months
• B)20.00 months
• C)24.04 months
• D)24.53 months

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Definitions:

PVGO

Present Value of Growth Opportunities; a model that estimates the value of a firm's shares excluding its current earnings, focusing on future growth.

P/E Ratio

Price-to-earnings ratio, a valuation metric for determining the relative worth of a company's shares by dividing stock price by earnings per share.

Cost of Equity

The return that investors require for investing in a company's equity, reflecting the risk of the investment.

Earnings Per Share

A metric used to determine a portion of a company's profit allocated to each outstanding share of common stock, calculated as net income divided by the number of shares.