Consider a credit card with a balance of $8500$⁢8500 and an APR of 12.5%12.5%. If you want to make monthly payments in order to pay off the balance in 22 years, what is the total amount you will pay? Round your answer to the nearest cent, if necessary.

To solve this problem, we need to determine the total amount paid by making monthly payments on a credit card with an initial balance of \$8500, an annual percentage rate (APR) of 12.5%, and a repayment period of 22 years. 

We can use the formula for calculating the monthly payment of a loan:

\[
M = P \frac{r(1 + r)^n}{(1 + r)^n - 1}
\]

Where:
- $ M $ = monthly payment
- $ P $ = principal (initial balance)
- $ r $ = monthly interest rate
- $ n $ = total number of payments (months)

### Step 1: Convert the APR to a monthly interest rate
The APR is 12.5%, so the monthly interest rate $ r $ is:

\[
r = \frac{12.5\%}{12} = \frac{0.125}{12} = 0.0104167
\]

### Step 2: Determine the number of payments
Since you want to pay off the balance in 22 years, the total number of monthly payments $ n $ is:

\[
n = 22 \times 12 = 264 \, \text{months}
\]

### Step 3: Apply the formula for monthly payment
Now, let's plug these values into the formula. The principal $ P $ is \$8500, the monthly interest rate $ r $ is 0.0104167, and the number of payments $ n $ is 264. We will calculate the monthly payment $ M $ and then multiply it by 264 to find the total payment over 22 years.

Let me calculate that.The monthly payment needed to pay off the balance in 22 years is approximately \$94.68. 

The total amount paid over the 22 years will be approximately \$24,995.82.

Would you like more details on how this was calculated, or have any other questions?

Here are 5 related questions to consider:
1. How would the total payment change if the APR was lower, say 10%?
2. What if you wanted to pay off the balance in 15 years instead of 22?
3. How much interest would you pay over the life of the loan?
4. What if you made an extra payment every year? How much sooner would the debt be paid off?
5. How would making larger monthly payments affect the total interest paid?

**Tip:** The faster you pay off a loan, the less you’ll pay in interest over time.

Consider a credit card with a balance of $8500 and an APR of 12.5%. If you want to make monthly payments in order to pay off the balance in 22 years, what is the total amount you will pay? Round your answer to the nearest cent, if necessary.

Learn how to calculate the total payment for a credit card balance of $8500 with an APR of 12.5% over 22 years. This guide includes step-by-step calculations using the loan payment formula and compound interest concepts. Suitable for Grades 11-12.

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