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 $12,100 balance from your current credit card, which charges an annual rate of 19.9 percent, to a new credit card charging a rate of 10.5 percent. How much faster could you pay the loan off by making your planned monthly payments of $230 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 3 percent fee charged on any balances transferred? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Explanation / Answer

a)

NPER(0.199/12,230,-12100,0)=125.192

NPER(0.105/12,230,-12100,0)=70.7983

125.192-70,7983=54.39 months

b) principal post transfer=12100*(1.03)=12463

hence period=nper(0.0105/12,230,-12463,0)=73.77

hence number of months =125.192-73.77=51.42

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