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(Solution document) I'm not sure what I'm doing wrong. Nabil has a balance of $3,000 on his credit card.


I'm not sure what I'm doing wrong. I need help.


Nabil has a balance of $3,000 on his credit card. Assume he only makes the minimum required payment of $90 on this balance every month until the card is paid off. Assume also that no new purchases are made with this card. The interest rate charged on the card is 18% per annum, compounded daily. How much total interest will he have paid on his card by the time the $3,000 is fully paid off?


a)   $1,654.33

b)   $1,490.20

c)    $1,203.80

d)   $1,200.41


I'm using a financial calculator and this is what I'm doing:

PV=3000

I/Y=18

P/Y=12

C/Y=365 (because it's compounded daily)

PMT=90

FV=0

Then I'm computing N and I find 27.20

So then I put N as 27.20 and compute everything the same as previous, except I compute for FV this time, but I get 7511.04$ which is not one of the options.

I'm so confused on what I'm doing wrong.

 







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