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:

Ownership Share

The portion of a company or asset owned by an individual or entity, typically represented by stock in the company.

Corporation

A legal entity recognized by law, formed to conduct business and capable of suing or being sued.

Financial Intermediary

An entity that acts as a middleman between two parties in a financial transaction, such as banks, investment funds, and insurance companies.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation and output increases.