Compute a final numerical answer for each of the following problems. You should work out your solutions on loose leaf paper, however, I may or may not collect your worked out solutions. To be safe, however, I suggest that you write out a solution for every problem and be ready to turn it in if asked. For any problems that require multiple steps, be sure to carry all intermediate step calculations to at least four (4) decimal places to ensure that your final numerical answer is as precise as possible.
When recording your final numerical answers on iCollege, round all dollar answers to 2 decimal places, round time (years or months) answers to one (1) decimal place and record interest rates as percent values rounded to one (1) decimal place. However, be sure to input a dollar sign, commas, or percent sign on iCollege. For example, record $3,284.33965 as 3284.34, record 37.285432 years as 37.3 and record .064358 = 6.4358% as 6.4.
You have a $28,000 balance on your credit card. You plan to make monthly payments of $550 until the balance is paid off. The interest rate on your credit card is 19.5% p.a., compounded monthly. A letter in the mail informs you that you are approved for a new credit card and balance transfers are subject to a 8.5% p.a., compounded monthly. How many months sooner will you pay off your bill?