Question

Aaron has an unpaid balance of $637.24 on his credit card statement at the beginning of March. He made a payment of $25.00 during the month, and made purchases of $375.44. If the interest rate on Aaron’s credit card was 12% per month on the unpaid balance, find his finance charge and the new balance on April 1.

Answer 1

See below in bold.

Explanation:

His balance at the end of the month is

637.24 - 25 + 375.44 = $987.68.

So the finance charge is 987.68 * 0.12 = $118.52

and his new balance is 118.52 + 987.68 = $1106.20.