Question

The balance on Richelle's charge account is $243.96. When the bill comes, she makes a $50.00 payment. The interest rate is 1.5% on the unpaid balance. If she does not make any additional charges, what will her new balance be the next month?

Answer 1

The new balance the next month is $196.87

Explanation:

The unpaid balance before interest is: $243.96

She makes a payment of: $50.00

So we subtract the payment from the unpaid balance:

$243.96 - $50.00 = $193.96

New balance: $193.96

Interest rate = 1.5%

193.96 × 1.5/100 = 2.91

Interest: 2.91

new balance = balance + interest = 193.96 + 2.91 = 196.87

The new balance the next month would be: $196.87