Paying off Debt
Alex wants to pay off his credit card balance before he gets married. He decides to take the
$2,300 out of his savings and apply it to his credit card debt of $5,390. The credit card has an
APR of 16.5%. What will Alex's minimum monthly credit card payment be in order to pay off his
debt in 14 months - ANS-c.
$244.15
\Billy has a credit card with a current balance of $3,500 and a 16% APR. With his current
monthly payment, he will be able to pay off this debt in 15 months. But Billy just learned that he
is getting a raise at work. If he puts all of the extra income from his raise into his monthly credit
card payment, how much additional monthly income would he require from his raise to pay off
the credit card in 12 months - ANS-a.
$58.57
\Carl has a credit card with a balance of $5,260 and an APR of 21%. With the monthly
payments he has been making, Carl would be able to pay off his credit card in 18 months. After
receiving a promotional offer in the mail, Carl decides to transfer his balance to a new credit
card with a 15% "introductory" APR for the first 12 months. After 12 months, the APR increases
to 23%. How much will Carl save in finance charges (interest) if he pays off the credit card
before the introductory APR expires - ANS-b.
$480.30
\Cesar is excited that he only has 12 months left before he pays off his credit card completely.
His current balance is $3,750 and his APR is 17.5%. But when he is involved in a car accident,
he is forced to use his credit card to pay a $1,000 deductible to get his car fixed. How much will
Cesar's minimum monthly payment increase if he still wants to pay off his credit card in 12
months - ANS-b.
$91.44
\Chuck has a credit card balance of $4,750 with an APR of 17%. With his existing debt payment
plan, Chuck will not be able to pay off the debt for another 20 months. To speed up the process,
Chuck decides to take $2,000 from his savings and apply it to the balance. He plans to pay the
remaining balance in 12 months. How much will Chuck save in finance charges (interest) by
doing this - ANS-b.
$478.28
\Cynthia had a credit card with a 17% APR and a $3,265 balance. She had budgeted to have
the credit card paid off in 24 months. But after missing a single monthly payment, Cynthia's
credit card company has increased her interest rate to 21%. How much extra will Cynthia have
to pay in finance charges (interest) because of the increase in her APR if she still pays off the
credit card in 24 months - ANS-a.
$152.16
\Frank has four different credit cards, the balances and interest information of which are outlined
in the table below. As Frank was developing a debt payment plan, Charles suggested that he
pay off the credit cards beginning with the highest balance, working his way down. If Frank
, chooses to follow Charle's advice, in what order should Frank plan on paying off his credit
cards?
Credit Card
Balance
APR
A
$2,380
19%
B
$4,500
15%
C
$1,580
17.50%
D
$900
21% - ANS-b.
B, A, C, D
\Frank has four different credit cards, the balances and interest information of which are outlined
in the table below. As Frank was developing a debt payment plan, Rick suggested that he pay
off the credit cards beginning with the highest interest rate, working his way down. If Frank
chooses to follow Rick's advice, in what order should Frank plan on paying off his credit cards?
Credit Card
Balance
APR
A
$2,380
19%
B
$4,500
15%
C
$1,580
17.50%
D
$900
21% - ANS-a.
D, A, C, B
\Frank has four different credit cards, the balances and interest information of which are outlined
in the table below. He would like to consolidate his credit cards to a single credit card with an
Alex wants to pay off his credit card balance before he gets married. He decides to take the
$2,300 out of his savings and apply it to his credit card debt of $5,390. The credit card has an
APR of 16.5%. What will Alex's minimum monthly credit card payment be in order to pay off his
debt in 14 months - ANS-c.
$244.15
\Billy has a credit card with a current balance of $3,500 and a 16% APR. With his current
monthly payment, he will be able to pay off this debt in 15 months. But Billy just learned that he
is getting a raise at work. If he puts all of the extra income from his raise into his monthly credit
card payment, how much additional monthly income would he require from his raise to pay off
the credit card in 12 months - ANS-a.
$58.57
\Carl has a credit card with a balance of $5,260 and an APR of 21%. With the monthly
payments he has been making, Carl would be able to pay off his credit card in 18 months. After
receiving a promotional offer in the mail, Carl decides to transfer his balance to a new credit
card with a 15% "introductory" APR for the first 12 months. After 12 months, the APR increases
to 23%. How much will Carl save in finance charges (interest) if he pays off the credit card
before the introductory APR expires - ANS-b.
$480.30
\Cesar is excited that he only has 12 months left before he pays off his credit card completely.
His current balance is $3,750 and his APR is 17.5%. But when he is involved in a car accident,
he is forced to use his credit card to pay a $1,000 deductible to get his car fixed. How much will
Cesar's minimum monthly payment increase if he still wants to pay off his credit card in 12
months - ANS-b.
$91.44
\Chuck has a credit card balance of $4,750 with an APR of 17%. With his existing debt payment
plan, Chuck will not be able to pay off the debt for another 20 months. To speed up the process,
Chuck decides to take $2,000 from his savings and apply it to the balance. He plans to pay the
remaining balance in 12 months. How much will Chuck save in finance charges (interest) by
doing this - ANS-b.
$478.28
\Cynthia had a credit card with a 17% APR and a $3,265 balance. She had budgeted to have
the credit card paid off in 24 months. But after missing a single monthly payment, Cynthia's
credit card company has increased her interest rate to 21%. How much extra will Cynthia have
to pay in finance charges (interest) because of the increase in her APR if she still pays off the
credit card in 24 months - ANS-a.
$152.16
\Frank has four different credit cards, the balances and interest information of which are outlined
in the table below. As Frank was developing a debt payment plan, Charles suggested that he
pay off the credit cards beginning with the highest balance, working his way down. If Frank
, chooses to follow Charle's advice, in what order should Frank plan on paying off his credit
cards?
Credit Card
Balance
APR
A
$2,380
19%
B
$4,500
15%
C
$1,580
17.50%
D
$900
21% - ANS-b.
B, A, C, D
\Frank has four different credit cards, the balances and interest information of which are outlined
in the table below. As Frank was developing a debt payment plan, Rick suggested that he pay
off the credit cards beginning with the highest interest rate, working his way down. If Frank
chooses to follow Rick's advice, in what order should Frank plan on paying off his credit cards?
Credit Card
Balance
APR
A
$2,380
19%
B
$4,500
15%
C
$1,580
17.50%
D
$900
21% - ANS-a.
D, A, C, B
\Frank has four different credit cards, the balances and interest information of which are outlined
in the table below. He would like to consolidate his credit cards to a single credit card with an
