Final answer:
To find the new balance after one month, calculate the monthly interest on the starting balance and then subtract any payments made. The monthly interest for a $500 balance at 19.996% APR is approximately $8.33. After subtracting the minimum payment of $15, the new balance would be $493.
Step-by-step explanation:
To calculate the new balance after one month of using a credit card with an interest rate of 19.996%, we need to calculate the interest for one month and add it to the starting balance. Since the interest rate provided is annual, we divide this by 12 to get the monthly interest rate, which is
19.996% / 12 = 1.6663% per month.
The interest for one month on a $500 balance is
$500 × 1.6663% = $8.33 (rounded to the nearest cent).
Adding this interest to the starting balance,
$500 + $8.33 = $508.33.
This is the balance before the minimum payment. Given the minimum payment is 3% of the starting balance, the minimum payment would be
$500 × 3% = $15.
Subtracting the minimum payment from the balance with interest gives us
$508.33 - $15 = $493.33.
Therefore, after the minimum payment, the new balance owed would be $493.33, which we round to the nearest dollar, making it $493.
However, none of the provided options (A. $515 B. $511 C. $525 D. $519) match the calculated balance of $493.
It's possible that the question intended to ask how much interest would be owed after one month, not the total balance. If we only consider the interest, $8.33 would be closest to option B. $511 if the intent was to round to the next highest option that includes the interest.