QuestionJuly 30, 2025

How long would it take to repay a 2,000 credit card debt at a 19% interest rate by making ONLY the minimum required payment of 25/month 9 months. 2 years. 6 years, 9 months. 15 years. 22 years.

How long would it take to repay a 2,000 credit card debt at a 19% interest rate by making ONLY the minimum required payment of 25/month 9 months. 2 years. 6 years, 9 months. 15 years. 22 years.
How long would it take to repay a 2,000 credit card debt at a 19%  interest rate by making ONLY the minimum
required payment of 25/month
9 months.
2 years.
6 years, 9 months.
15 years.
22 years.

Solution
4.2(345 votes)

Answer

22 years. Explanation 1. Calculate monthly interest rate Convert annual interest rate to monthly: 19\% annually is \frac{19}{12}\% per month. 2. Determine monthly interest amount Multiply balance by monthly interest rate: 2000 \times \frac{19}{12} \times 0.01 = \31.67. 3. Compare payment and interest Minimum payment is \25, which is less than the interest (\31.67), so debt increases each month. 4. Estimate repayment time Since the minimum payment doesn't cover the interest, the debt will grow indefinitely.

Explanation

1. Calculate monthly interest rate<br /> Convert annual interest rate to monthly: $19\%$ annually is $\frac{19}{12}\%$ per month.<br />2. Determine monthly interest amount<br /> Multiply balance by monthly interest rate: $2000 \times \frac{19}{12} \times 0.01 = \$31.67$.<br />3. Compare payment and interest<br /> Minimum payment is \$25, which is less than the interest (\$31.67), so debt increases each month.<br />4. Estimate repayment time<br /> Since the minimum payment doesn't cover the interest, the debt will grow indefinitely.
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