The Credit Card Equation calculator computes the amount of time required to payoff a credit card, or other fixed rate loan, based on the annual interest rate (APR), total balance (b). and monthly payment (p).
INSTRUCTION: Choose units and enter the following:
Payoff Time (N): vCalc will return the time to pay off the credit card in months. However this can be automatically converted to other time units (e.g. weeks or years) via the pull-down menu.
`N = - 1/30 * ln(1 + b/p*(1-(1+"APR"/365)^30))/ln(1+"APR"/365)`
NOTE: This payoff period assumes a fixed rate of interest AND that no other principle is added to the balance.
The(APR) based on a regular payment (p) against a standing debt (b). APR is listed in the credit card contract and may appear on the credit card statement. An cites that APRs have an average between 16% and 18% based on the type of card.
This formula is very useful in determining whether additional payments or increased payments should be made in order to pay off a credit card in an acceptable period.