Mary's credit card situation is out of control because she cannot afford to make her monthly payments. she has three credit cards with the following loan balances and aprs: card 1, $4 comma 3004,300, 2121%; card 2, $5 comma 8005,800, 2525%; and card 3, $3 comma 1003,100, 1717%. interest compounds monthly on all loan balances. a credit card loan consolidation company has captured mary's attention by stating they can save mary 2323% per month on her credit card payments. this company charges 16.516.5% apr. is the company's claim correct? assume a 1010-year repayment period.

The claim is not rtue for Mary's financial situation

However, she will save up to 6.15% per month if the lona is taken.

Explanation:

4,300   21 %

5,800  25 %

3,100    17  %

we will do interest expense per month  under the current situation

and the situation if the loan is taken.

4,300 x 0.21/12  = 75.25

5,800 x 0.25/12 = 120.83

3,100  x 0.17/12   = 43.92

      total interest   240

offer of 16.5% APR

4,300 + 5,800 + 3,100 = 13,200

we calculate the monthly cuota of a 10 year loan  at 16.5% APR which present value is 13,200

PV  $13,200.00

time120 (10 years x 12 months per year)

rate0.01375 (0.165 / 12 month per year)

C  $ 225.25

Now we compare the savings:

240 - 225.25 = 14.75

14.75 / 240 = 0,0614583 = 6.15%

anjan should should report alteast 5000 on the first apyment and 10,000 each year

explanation:

they work in some type of way