Question

Compute the new balance on a credit card assuming that: · beginning balance = rm450 · purchases during the month = rm300 · payments made within the grace period = rm250 · interest rate = 18% a) rm550 b) rm503 c) rm516 d) rm1,000

Answer 1

The new credit card balance, after accounting for the beginning balance, purchases, and payments made during the grace period (thus incurring no interest), is RM500, which is not one of the options provided. The closest option is a) RM550.

Step-by-step explanation:

The question asks us to calculate the new balance on a credit card after accounting for the beginning balance, purchases, payments, and interest rate. To compute it, start with the beginning balance of RM450 and add RM300 for purchases during the month. Then, subtract payments made within the grace period, RM250. Since the payments were made within the grace period, typically, no interest is charged on the payments if the entire balance isn't carried over. Therefore, the new balance before interest would be RM500. The interest rate is irrelevant in this case because the assumption is that the grace period applies and the balance won't accrue interest. So, the correct new balance after these transactions would be RM500, but since we pay within the grace period, we have RM0 in interest, meaning the ending balance is RM500, which is not an option provided. The closest option to the correct answer is option a) RM550.