Kathy Hansen has a revolving credit account. The finance charge is calculated on the previous month's balance, and the annual percentage rate is 21%. Complete the following five-month account activity table for Kathy.
Previous | Purchases | ||||
Month's | Finance | and Cash | Payments | Nest Balance | |
Month | Balance | Charge | Advances | and Credits | End of Month |
8. | March | $560.00 | _____ | $121.37 | $55.00 |
_____
To calculate: The finance charge and the new balance at the end of the month if Kathy Hansen has a revolving credit account, the previous month balance is
Given Information:
Kathy Hansen has a revolving credit account, the previous month balance is
Formula used:
Follow the steps mentioned below to compute the finance charge and new balance by using the unpaid balance method:
Step 1: The monthly periodic rate is computed by dividing the annual percentage rate by the number of months in a year that is
Step 2: The finance charge is computed by multiplying the balance of the previous month with the monthly periodic rate.
Step 3: The new balance is computed by adding all previous month balance, finance charge, purchases and cash advances and subtracting the total of payments and credits.
Calculation:
Consider that previous month balance is
Compute monthly periodic rate by substituting annual percentage rate equals to
Finite Mathematics and Applied Calculus (MindTap Course List)
Applied Calculus for the Managerial, Life, and Social Sciences: A Brief Approach
Probability and Statistics for Engineering and the Sciences
Applied Calculus
Intermediate Algebra
Single Variable Calculus
Mathematical Applications for the Management, Life, and Social Sciences
Statistics for The Behavioral Sciences (MindTap Course List)
Elementary Technical Mathematics
Multivariable Calculus
Calculus: Early Transcendentals
Calculus (MindTap Course List)
Mathematical Excursions (MindTap Course List)
Single Variable Calculus: Early Transcendentals, Volume I
Essentials Of Statistics
Calculus: An Applied Approach (MindTap Course List)
Elementary Geometry For College Students, 7e
Essentials of Statistics for The Behavioral Sciences (MindTap Course List)
Understanding Basic Statistics
Calculus: Early Transcendental Functions
Precalculus: Mathematics for Calculus (Standalone Book)
Calculus of a Single Variable
Calculus: Early Transcendental Functions (MindTap Course List)
Trigonometry (MindTap Course List)
Elements Of Modern Algebra
Single Variable Calculus: Early Transcendentals
Finite Mathematics for the Managerial, Life, and Social Sciences
Study Guide for Stewart's Single Variable Calculus: Early Transcendentals, 8th
Study Guide for Stewart's Multivariable Calculus, 8th
Elementary Geometry for College Students