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The finance charge on Casey's account was $10.25 and her new balance is $347.25

The finance charge on Casey's account was $10.25 and her new balance is $347.25-example-1
The finance charge on Casey's account was $10.25 and her new balance is $347.25-example-1
The finance charge on Casey's account was $10.25 and her new balance is $347.25-example-2
The finance charge on Casey's account was $10.25 and her new balance is $347.25-example-3

1 Answer

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To compute the new balance we are going to use the steps given in the example with the information given.

The average daily balance will be:

$10,594.36 divided by 31 days, so, the average daily balance is equal to $341.75

The finance charge will be found multiplying 3/100 (3%) by the average daily balance, doing so we get:

$341.75*3/100 = $10.25.

To find the new balance we are going to make the following calculation:

Previous balance + new charges (include finance charge and new purchases) - credit payments (include credit and payments)

Replacing the values, from the table, in the equation we have:

$350(previous balance) + $10.25 (finance charge) + 70.94 (new purchases) - $0 (credit) - $83.94(payments)= $347.25

Therefore the new balance is equal to $347.25.

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