Question

elizabeth just received her credit card bill. she calculates the compound interest on her bill and considers the payments she could make. if she pays the minimum payment of $45, it will take her five years to bring her balance to $0. how can elizabeth most responsibly pay off her bill sooner?

• continue paying the minimum monthly payment
• pay it off with a different credit card
• take out a personal loan from a bank
• pay more than the minimum payment each month

Explanation:

To pay off the credit card bill sooner, we analyze each option:

• Continuing minimum payments (first option) takes 5 years as given, so it's not sooner.
• Using another credit card (second option) may involve similar or higher interest, not helping to pay sooner.
• Taking a personal loan (third option) adds loan - related costs and processes, not a direct way to pay the credit card bill sooner.
• Paying more than the minimum (fourth option) reduces the principal faster, so interest accumulates less, and the bill is paid off in a shorter time.

Answer:

D. pay more than the minimum payment each month