Question

PLZ HELP 10 PIONTS

Lucia's credit card company calculates a finance charge based upon a periodic rate of 1.57% on all unpaid balances. If Lucia has an unpaid balance of $125.89, determine the finance charge that she will be assessed.
Round your answer to two decimal places.



$127.46

$124.32

$197.65

$1.98

Answer 1

The correct answer is:

$1.98

Explanation:

we are told that the finance charge is 1.57% on the unpaid balances. so it is calculated as follows:

unpaid balance = $125.89

finance charge = 1.57% of unpaid balance.

note that 1.57% = 1.57/100 = 0.0157

∴ finance charge = 0.0157 × 125.89 = 1.976 = $1.98 ( to 2 decimal places).