Kate has a balance of $ 1,080 on her credit card. If she makes no purchases and pays $ 90 each month, will her credit card balance be payed off in a year? Explain.

1 Answer
Evan
May 1, 2018

In theory, yes.
In reality, no.

Explanation:

In theory, yes.

According to the question, since there is no interest stated whatsoever.

#$1080-12($90)=$0#

Kate will pay off her credit card balance in a year.

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In reality, no.

Credit card loans always carry with them an interest rate. Credit card loans interests rates can be compounded daily, monthly or annually.

With interest, Kate will not pay off her credit card balance in a year.

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