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As a New Year's resolution, Jimmy has agreed to pay off his 4 credit cards and completely eliminate his credit card debt within the next 12 months. Listed below are the balances and annual percentage rates for Jimmy's credit cards.

In order to pay his credit card debt off in the next 12 months, what will Jimmy's total minimum credit card payment be?

\begin{tabular}{|c|c|c|}
\hline Credit Card & Current Balance & APR \\
\hline A & [tex]$\$[/tex] 563.00[tex]$ & $[/tex]16 \%[tex]$ \\
\hline B & $[/tex]\[tex]$ 2,525.00$[/tex] & [tex]$21 \%$[/tex] \\
\hline C & [tex]$\$[/tex] 972.00[tex]$ & $[/tex]19 \%[tex]$ \\
\hline D & $[/tex]\[tex]$ 389.00$[/tex] & [tex]$17 \%$[/tex] \\
\hline
\end{tabular}

a. [tex]$\$[/tex] 321.83[tex]$

b. $[/tex]\[tex]$ 361.45$[/tex]

c. [tex]$\$[/tex] 374.65[tex]$

d. $[/tex]\[tex]$ 411.25$[/tex]

Please select the best answer from the choices provided.



Answer :

GinnyAnswer
In order to determine Jimmy's total minimum credit card payment for the next 12 months, we need to follow these steps:

1. Calculate the monthly interest for each credit card:

The formula to calculate the monthly interest is:

[tex]\[ \text{Monthly Interest} = \frac{\text{Balance} \times \text{APR}}{\text{Number of Months}} \][/tex]

Let's calculate the monthly interest for each credit card:

- Credit Card A:
[tex]\[ \text{Balance} = 563.00 \quad \text{APR} = 0.16 \][/tex]
[tex]\[ \text{Monthly Interest} = \frac{563.00 \times 0.16}{12} = 7.5067 \][/tex]

- Credit Card B:
[tex]\[ \text{Balance} = 2525.00 \quad \text{APR} = 0.21 \][/tex]
[tex]\[ \text{Monthly Interest} = \frac{2525.00 \times 0.21}{12} = 44.1875 \][/tex]

- Credit Card C:
[tex]\[ \text{Balance} = 972.00 \quad \text{APR} = 0.19 \][/tex]
[tex]\[ \text{Monthly Interest} = \frac{972.00 \times 0.19}{12} = 15.39 \][/tex]

- Credit Card D:
[tex]\[ \text{Balance} = 389.00 \quad \text{APR} = 0.17 \][/tex]
[tex]\[ \text{Monthly Interest} = \frac{389.00 \times 0.17}{12} = 5.5108 \][/tex]

2. Calculate the minimum payment for each credit card:

The formula to calculate the minimum payment is:

[tex]\[ \text{Minimum Payment} = \frac{\text{Balance}}{\text{Number of Months}} + \text{Monthly Interest} \][/tex]

Let's calculate the minimum payment for each credit card:

- Credit Card A:
[tex]\[ \text{Minimum Payment} = \frac{563.00}{12} + 7.5067 = 46.9167 + 7.5067 = 54.4233 \][/tex]

- Credit Card B:
[tex]\[ \text{Minimum Payment} = \frac{2525.00}{12} + 44.1875 = 210.4167 + 44.1875 = 254.6042 \][/tex]

- Credit Card C:
[tex]\[ \text{Minimum Payment} = \frac{972.00}{12} + 15.39 = 81.0000 + 15.39 = 96.39 \][/tex]

- Credit Card D:
[tex]\[ \text{Minimum Payment} = \frac{389.00}{12} + 5.5108 = 32.4167 + 5.5108 = 37.9275 \][/tex]

3. Sum the minimum payments:

[tex]\[ \text{Total Minimum Payment} = 54.4233 + 254.6042 + 96.39 + 37.9275 = 443.345 \][/tex]

The total minimum payment necessary for Jimmy to pay off his credit card debts in 12 months is \[tex]$443.34. None of the provided choices match this value exactly. However, based on the closest numerical value provided, the correct answer is: \[ d. \$[/tex]411.25
\]

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