Question

Leroy's credit card has an APR of 21%, calculated on the previous monthly

balance, and a minimum payment of 2%, starting the month after the first
purchase. His credit card record for the last 7 months is shown in the table
below.
How much of the initial purchase has Leroy paid off over the 7 months?
A. $310.06
B. $271.30
C. $44.93
D. $38.76

Answer 1

Leroy has paid off $1,934.76 of the initial purchase over the 7 months.

Step-by-step explanation:

To calculate the amount of the initial purchase that Leroy has paid off over the 7 months, we need to find the total payments he has made and subtract it from the total balance. We can start by calculating Leroy's minimum payment for each month:

1. Month 1: $800 (first month after the first purchase)
2. Month 2: 2% of $3,087.15 ($61.74)
3. Month 3: 2% of $3,025.68 ($60.51)
4. Month 4: 2% of $2,965.20 ($59.30)
5. Month 5: 2% of $2,905.71 ($58.11)
6. Month 6: 2% of $2,847.16 ($56.94)
7. Month 7: 2% of $2,789.52 ($55.79)

Adding up all the minimum payments, we get:

Total minimum payments = $800 + $61.74 + $60.51 + $59.30 + $58.11 + $56.94 + $55.79 = $1,152.39

Now, we can subtract the total minimum payments from the total balance to find the amount of the initial purchase that Leroy has paid off:

Initial purchase paid off = $3,087.15 - $1,152.39 = $1,934.76

Therefore, Leroy has paid off $1,934.76 of the initial purchase over the 7 months.