How long will it take to pay off your balance

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1. You plan to buy a Honda car which currently costs $22,000. The car dealer offers the following two options: you can either borrow the entire amount at low interest rate of 1.99% per year compounded monthly for 36 months or get a cash rebate of $1,200 and borrow at 4.99% per year compounded monthly for 36 months. Which option is better for you?

Lower interest rate since monthly payment is $623

Lower interest rate since monthly payment is $630

Cash rebate rate since monthly payment is $623

Cash rebate rate since monthly payment is $635

2. You charged $1,000 on your credit card for Christmas presents. Your credit card company charges you 18.99% annual interest, compounded monthly. If you make the minimum payments of $30 per month, how long will it take ( to the nearest month) to pay off your balance?

a. 27 months

b. 64 months

c. 48 months

d. 54 months

Reference no: EM131568395

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