Question

Please help

You charged $800 on a credit card and it has an interest rate of 12% APR. You make a payment of $200, how much is your TOTAL BALANCE after one month?

1. $600
2. $672
3. $608
4. $896

Answer 1

The total balance after one month is $406.

Step-by-step explanation:

To calculate the total balance after one month, we need to consider the interest charged on the remaining balance.

Step 1: Calculate the interest charged for one month

Interest = Balance × (Annual Interest Rate / 12)

Interest = $600 × (0.12 / 12) = $6

Step 2: Subtract the payment made from the balance

Remaining Balance = Previous Balance - Payment Made

Remaining Balance = $600 - $200 = $400

Step 3: Add the interest to the remaining balance

Total Balance After One Month = Remaining Balance + Interest

Total Balance After One Month = $400 + $6 = $406

Therefore, the total balance after one month is $406.

Answer 2

The interest charge after one month can be calculated by multiplying the balance by the monthly interest rate, which is 12% divided by 12 months, or 0.12 / 12 = 0.01. The balance after one month would be:

$800 * (1 + 0.01) = $808

The total balance after one month and after making a $200 payment would be:

$808 - $200 = $608

So, the answer is $608.