Question

#10 Solve the problem using the unpaid balance method.

The account balance on April 1st is $60.15. On April 15th a payment of $51.00 is made. On April 25th a purchase of $91.27 is made. What is the finance charge if the annual rate is 18%? What is the new account balance?

Finance charge = $______
New account balance = $_____

Answer 1

Hi there!
The answer is as follows:

Finance charge = $0.14
To get this you need to take the account balance on April 1st and subtract the payment of $51.00 multiply by the annual rate of 18%, which looks like this:

$60.15 - $51.00 = $9.15 × 0.18 = 1.647
Then you divide your answer by 12 for the months of the year to get:

1.647 ÷ 12 = 0.13725
Which rounds to $0.14 for you finance charge

New balance = $100.56
To get this you take the account balance on April 1st and subtract the payment of $51.00 and then add the purchase of $91.27 and the finance charge of $0.14, like so:

$60.15 - $51.00 = $9.15 + $91.27 + $0.14 = $100.56

Your friend, ASIAX