Number of Annuity Payments Joey Realizes That He Has Charged

question 24

Multiple Choice

Number of Annuity Payments Joey realizes that he has charged too much on his credit card and has racked up $3,000 in debt.If he can pay $150 each month and the card charges 18 percent APR (compounded monthly) ,how long will it take him to pay off the debt?

• A)13.03 months
• B)14.68 months
• C)20.00 months
• D)23.96 months

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Definitions:

Semiannual Coupon

Bonds that pay interest to the holder twice a year.

Accrued Interest

Interest that has been incurred but not yet paid, typically relevant in bond investments.

Annual Coupon Payment

The total interest payments made to bondholders annually, based on the bond's coupon rate and its face value.

Flat Price

The price of a bond without the inclusion of accrued interest, representing only its face value.