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You are two hours into your meeting with Albert, and his final questions revolve around his credit card balance and a SMART goal related to the information you have provided from your analysis.

1. Albert's credit card company isn’t the greatest at telling him how much interest he is paying each month. His most recent statement indicates an APR of 16.5% with interest compounding monthly. His current balance is $4,500, and he is about to make his regular monthly payment of $200.
- **Question:** How much interest will Albert incur the following month after he makes his next regular payment, assuming he makes no additional charges on the card?

2. After making his next payment, Albert wonders:
- **Question:** How many months will it take him to pay off his credit card if he continues paying at his current monthly rate of $200?
- **Question:** How many months will it take him if he makes only the minimum payment of $75 per month?

3. Develop one SMART goal for Albert based on all the information you have collected and analyzed during your visit.

4. **Question:** What is the difference between a tax deduction and a tax credit?

Answer :

Given Albert’s credit card balance of 4,500, an APR of 16.5% with interest compounding monthly and his current monthly payment of 200, the following month he will incur interest of 61.88.

This can be calculated using the following formula:

(16.5%/12) * 4500) = 61.88.

To determine how many months Albert will take to pay off his credit card if he continues paying at his current monthly rate, divide his total outstanding balance by his monthly payment.

This calculation will result in: (4500/200) = 22.5 months.

If Albert makes only the minimum payment of 75 per month, he will take 163 months to pay off his credit card.

This calculation can be done using a financial calculator or using the following formula:

(-ln(1-(16.5%/12)*4500/75)

/ln (1+(16.5%/12) = 163.15 months.

The SMART goal for Albert based upon all of the information collected and analyzed over the course of the visit could be: “Albert will reduce his credit card balance to 3,000 within 12 months by increasing his monthly payment to 350.”

A tax deduction reduces the amount of income that is subject to tax. The amount of the tax deduction reduces the total amount of income that is subject to tax, thereby reducing the taxpayer’s total tax liability.

A tax credit reduces the amount of tax liability by the amount of the credit.

To know more about compounding visit :

https://brainly.com/question/14117795

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