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Guadalupe's credit card has an APR of 23%, calculated on the previous monthly balance ,and a minimum payment of 2%, starting the month after the first purcahse. Her credit card record for the last seven months is shown in thw table below. How is the new balance calculated.

User Induane
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Answer:

As per the given information, Guadalupe's credit card has an APR (Annual Percentage Rate) of 23%, calculated on the previous monthly balance, and a minimum payment of 2%, starting the month after the first purchase. Let's calculate the new balance.

Month | Purchase | Payment | Interest | Balance

Jan | $1,200 | - | - | $1,200

Feb | $800 | $20 (2% of $1,200) | $23 (23% of $1,200) | $1,003

Mar | $500 | $20.06 (2% of $1,003) | $22.97 (23% of $1,003) | $1,006.91

Apr | $1,000 | $20.14 (2% of $1,006.91) | $22.94 (23% of $1,006.91) | $1,009.75

May | $600 | $20.20 (2% of $1,009.75) | $22.91 (23% of $1,009.75) | $601.86

Jun | $400 | $12.04 (2% of $600.93) | $11.61 (23% of $601.86) | $0

The new balance is calculated by adding the previous balance, the purchase amount, and the interest charges and then subtracting the payment made. For example, in February, the previous balance was $1,200, and the purchase was $800, so the total balance was $2,000. Then, the interest charges were added ($23), and the minimum payment of 2% of $1,200 ($20) was subtracted to get the new balance of $1,003.

Similarly, this process was repeated for the remaining months, and the final balance in June was $0 after paying off the entire balance. Therefore, the new balance is calculated by adding the previous balance, the purchase amount, and the interest charges and then subtracting the payment made.

User Hayk Saakian
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