Question

Calculate the unpaid balance, finance charge, and new balance using the unpaid balance method. Note: interest rate is given as a monthly rate.

Previous balance = $91.96

Payments/credits = $35.00

Unpaid balance = $

Monthly rate = 1.5%

Finance charge = $

New purchases = $113.98

New balance = $

Answer 1

Unpaid balance = $56.96

Finance charge = $0.8544

New balance =$171.7944

Explanation:

Given : Previous balance = $91.96

Payments/credits = $35.00

Monthly rate = 1.5%

New purchases = $113.98

To calculate : The unpaid balance, finance charge, and new balance using the unpaid balance method.

Solution :

Unpaid balance = Previous balance - Payments

Unpaid balance = $91.96- $35

Unpaid balance = $56.96

We have given rate of interest= 1.5%=0.015

Finance charge = Finance rate × Unpaid balance

Finance charge =
`0.015* 56.96`

Finance charge = $0.8544

New balance = Unpaid balance + finance charge + new transaction

New balance = $56.96 +$0.8544+ $113.98

New balance =$171.7944