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1. a. Suppose Jim spontaneously decides to treat all his friends to burgers and fries....

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Finance

1.

a. Suppose Jim spontaneously decides to treat all his friends to burgers and fries. He has already spent his excess cash from his paycheck so he decides to put it on his credit card and pay for it later. The total cost for the meal for his group of friends including the tip is $135.47. His credit card has an interest rate of 24.99%. If he makes payments of $25 per month, how long would it take him to pay for that spontaneous purchase?

N

I/Y

PV

PMT

FV

b. How much would Jim end up spending on this purchase? How much interest did he pay?

c. Now lets say Jim treats his friends a few times during the month and accumulates a debt of $746.53 on his credit card. His credit card and has an interest rate of 24.99%. If he makes payments of $25 per month how long would it take him to pay for this generosity which his friends appreciate but he cant currently afford?

N

I/Y

PV

PMT

FV

d. How much would Jim end up spending on this purchase? How much interest did he pay?

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