Question

7.1A Sharon Rice's monthly credit card statement has a previous balance of $307.85. It shows that Sharon made a $35.00 payment. This month, Sharon made two new purchases, $24.59 and $42.61. The account posted a $21.75 credit for a returned item and a finance charge is $6.78. What is the new balance? 7.1B Shannon Rice made three new purchases this month, $25.00, $35.65, and $23.85. She made a $50.00 payment. She had a finance charge of $4.50. If her new balance is $145.56, what was her previous balance? 7.1C Shaun Rice reviewed his credit card's monthly statement. It shows a this month's new purchases of $875.22 and $65.75.It also shows a $875.22 credit and a $45.30 finance charge. He also made the minimum payment of 2.5% of the previous balance. The new balance is $2494.20 What was the previous balance?

Answer 1

To calculate the credit card balances for Sharon, Shannon, and Shaun Rice, adjustments were made for payments, purchases, credits, and finance charges. Sharon's new balance is $324.08, Shannon's previous balance was $106.56, and Shaun's previous balance was exactly $2500.00, determined through a step-by-step calculation involving their transactions and the minimum payment rate.

Step-by-step explanation:

To solve the credit card balance problems for Sharon, Shannon, and Shaun, we'll use basic arithmetic operations and apply some simple financial principles.

7.1A - Sharon Rice's New Balance Calculation

To calculate Sharon's new balance, we'll need to adjust her previous balance with her payment, the purchases she made, the credit she received for a returned item, and the finance charge. Here's the breakdown:

Previous balance: $307.85

Payment made: -$35.00

Purchases: $24.59 + $42.61

Credit for returned item: -$21.75

Finance charge: $6.78

So, Sharon's new balance is:

307.85 - 35.00 + 24.59 + 42.61 - 21.75 + 6.78 = $324.08.

7.1B - Shannon Rice's Previous Balance Calculation

Shannon's new balance is provided as $145.56, which includes her new purchases, payment made, and the finance charge. Now, we reverse the calculation to find her previous balance:

New purchases: $25.00 + $35.65 + $23.85

Payment made: -$50.00

Finance charge: $4.50

New balance: $145.56

Adding the payment and finance charge back to the new balance and then subtracting the new purchases gives Shannon's previous balance:

145.56 + 50.00 - 4.50 - (25.00 + 35.65 + 23.85) = $106.56.

7.1C - Shaun Rice's Previous Balance Calculation

Since Shaun's minimum payment was 2.5% of the previous balance, we can use his new balance and the details provided to find his previous balance:

New purchases: $875.22 + $65.75

Credit: -$875.22

Finance charge: $45.30

New balance: $2494.20

Subtract the finance charge and canceled purchase from the new balance, and then divide by 1.025 (which is 100% plus the 2.5% payment rate) to find the previous balance:

(2494.20 - 45.30 + 875.22 - (875.22 + 65.75)) / 1.025 = $2500.00.