Question

Feb. 9 Feb 13 Feb 22 Feb 26 Charge. At supplies Payment Charge: Flowers delivered Charge: Music CD $2120 $110.00 $7396 $12 24 On February 3, the billing date, Carol Ann had a balance due of $12363 on her credit card Her bank charges an interest rate of 1.25% per month. She made the transactions described in the table during the month. a) Determine the finance charge on March 3, using the previous balance method. a) The finance charge on March 3 is $) (Round to the nearest cent as needed) b) The new balance due on March 3 is so (Round to the nearest cent as needed) Enter your answer in each of the answer boxes

Answer 1

Assumed within 10days from bill date if credit card due is settled no financial charges.

Part a)

Since $110 has made within days hence no interest for this amount

Balance amount outstanding from February 3 is $123.63-$110 = $13.63

Financial charges = Balance amount outstanding*1.25% = $13.63*1.25% = $0.17

Part b)

New balance due on march 3 = Balance due on February 3+Current month transaction+Financial charges-Payment = $123.63+108.06+0.17-110 = $121.86