Your Christmas ski vacation was great, but it unfortunately ran a bit over budge

Question

Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $13,200 balance from your current credit card, which charges an annual rate of 21 percent, to a new credit card charging a rate of 11.6 percent.

How much faster could you pay the loan off by making your planned monthly payments of $285 with the new card? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

What if there was a 2 percent fee charged on any balances transferred? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Your Christmas ski vacation was great, but it unfortunately ran a bit over budget. All is not lost: You just received an offer in the mail to transfer your $13,200 balance from your current credit card, which charges an annual rate of 21 percent, to a new credit card charging a rate of 11.6 percent.

Explanation / Answer

no of month require to pay with interest rate 21%

%13,200=285*PVAF(1.75%,N)

N = 95.8861. month

with interest rate 11.6%

13200=285*PVAF(.967 ,N)

N =61.72

with 2% fee charged

13500(1.02)=285PVAF(.967%,N)

N=65.426 month

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