a. I will payoff about $243 and 67 cents each month.
b. I will pay a total interest of 39.24%.
How do credit card payoffs work?
They work on the principle of compound interest.
After one year, I have to pay $(4200*18)/100 =$756 extra
which means my principle amount for second year will be 4200+756=4956$
After second year, I have to pay $(4956*18)/100=$892.08 extra
Total payoff at the end of second year=$4200+$756+$892.08=$5848.08
Therefore, each month I need to pay (5848.08/24)=$243.67
To calculate the interest:
Interest= (Total amount payoff - initial balance)*100/initial balance
=(5848.08-4200)*100/4200
=39.24%
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