Question

Solve the problem using the previous 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 balance = $ ____

Answer 1

Annual Percent Rate (APR) = 18%

Rate during the current billing cycle = 18/12 = 1.5%

Balance at the beginning of the billing cycle = 60.15

Payment 51.00

Balance 10.15

Purchase 91.27

Balance - 81.12

Finance Charge 60.15 * 0.015 = 0.90

New Balance - 82.02