Question

The previous statement for your credit card had a balance of $540. You make purchases of $140 and make a payment of $80. The credit card has an APR of 24%. What is the finance charge for this month? (Round your answer to the nearest cent.)

Answer 1

The previous statement for your credit card had a balance of $540

You make purchases of $140

And make a payment of $80

Therefore,new credit card balance is

$\begin{gathered} \text{Credit card balance }=540+140-80 \\ \text{Credit card balance }=\text{ \ 600} \end{gathered}$

Now using an APR of 24%

The finance charge will be calculated as

$\begin{gathered} Fin\text{ance charge }=\frac{600\times24\times30}{365\times100} \\ Fin\text{ance charge }=\text{\ 11.84} \end{gathered}$

Therefore, the finance charge is $11.84