Question

Ryan's unpaid credit card balance was $1853.68. His APR is 24.9%. What is his new balance after he makes one new transaction for $178?

Answer 1

$2070.14

Explanation:

Credit card terms vary, as do methods of computing interest and new balance. Here, we'll assume that no payment has been made (in violation of the terms of the credit card), and that the finance charge is only applied to the previous balance.

The finance charge is ...

$1853.68 × 0.249 ÷ 12 = $38.46 . . . . . . . the monthly rate is 0.249÷12

Then the new balance will be the sum of the previous balance, finance charge, and new transaction(s):

$1853.68 +38.46 + 178.00 = $2070.14

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Comment on lack of payment

Because no payment has been made, there may also be a late-payment charge added to the balance.