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You have a credit card with an APR of 21.8%. You begin with a balance of $1300, in response to which you make a payment of $300. The first month you make charges amounting to $500. You make a payment of $300 to reduce the new balance, and the second month you charge $600. Complete the following table. (Round your answers to the nearest cent.)

You have a credit card with an APR of 218 You begin with a balance of 1300 in response to which you make a payment of 300 The first month you make charges amoun class=

Respuesta :

Given that the credit card has an APR of 21.8%=0.218.

The previous balance in the first month is $1300. The payment is $300 and the purchase is equal to $500.

now, we need to find the finance charges by the following formula:

[tex]\frac{APR}{12}\times(PreviousBalance-payments+purchases)[/tex]

Substitute the given values in the formula:

[tex]\frac{0.218}{12}\times(1300-300+500)=27.25[/tex]

now, the new balance for the first month will be equal to Previous balance-payments+purchases+finance charges

[tex]1300-300+500+27.25=1527.25[/tex]

the same calculation goes for the second month. the previous balance for second month is $1527.25. The payment is $300 and the purchase is equal to $600.

The finance charges for the second will be:

[tex]\frac{0.218}{12}\times(1527.25-300+600)=33.20[/tex]

So, the new balance for the second month will be

[tex]1527.25-300+600+33.20=1860.45[/tex]

Now, you can fill the table your self.

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