Jason has $3,568.15 in credit card debt. The annual interest rate on the unpaid balance is 18.4% compounded monthly. If Jason wants to pay off his credit card debt in 2 years, what is his monthly payment, assuming he makes no additional purchases on this card? (Suggestion: Use the formula for the present value of an ordinary annuity. Round your answer to the nearest cent.)

The problem requires us to calculate Jason's monthly payment to pay off his credit card debt within 2 years, given a monthly compounding interest rate. To solve this, we will use the formula for the present value of an ordinary annuity.

### Formula:
\[
PV = P \times \left(\frac{1 - (1 + r)^{-nt}}{r}\right)
\]
Where:
- $PV$ = Present value (the amount of debt) = $3,568.15
- $P$ = Monthly payment (what we need to find)
- $r$ = Monthly interest rate = $\frac{18.4\%}{12} = 0.01533$
- $n$ = Number of payments per year = 12
- $t$ = Time in years = 2

We will rearrange the formula to solve for $P$, the monthly payment.

\[
P = \frac{PV \times r}{1 - (1 + r)^{-nt}}
\]

Now, let's calculate the monthly payment.Jason's monthly payment to pay off his credit card debt in 2 years would be approximately **$178.83**.

Would you like further details or clarification on any part of the solution?

Here are 5 related questions to explore:
1. How would the monthly payment change if the interest rate was 20% instead of 18.4%?
2. What would be the monthly payment if Jason wanted to pay off the debt in 3 years instead of 2?
3. How much total interest will Jason pay over the 2 years?
4. How does compounding monthly compare to compounding annually in terms of payment size?
5. What is the formula for the future value of an annuity?

**Tip:** Always pay attention to the compounding period, as it significantly affects the total interest paid.

Learn how to calculate the monthly payment required to pay off a $3,568.15 credit card debt in 2 years with an 18.4% interest rate compounded monthly. This problem involves key financial concepts like the present value of an annuity and interest rate calculations.

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