James has a credit card with a monthly rate of 1.7%. The account applies the unpaid balance method. His unpaid balance for the Feb billing cycle is $546.50. During the billing cycle he made purchases of $394.01, returned items for $40.44, and made a payment of $170.00. Find the new balance.

Question

Quizplus · Accepted Answer

First, we need to calculate the total credits and charges during the billing cycle:

Purchases: $394.01
Returns: -$40.44
Payment: -$170.00

Total credits and charges: $183.57

Next, we need to calculate the interest charged on the unpaid balance:

Interest = unpaid balance x monthly interest rate
Interest = $546.50 x 0.017
Interest = $9.29

Finally, we can calculate the new balance:

New balance = unpaid balance + total credits and charges + interest
New balance = $546.50 - $170.00 + $394.01 - $40.44 + $9.29
New balance = $739.36

Therefore, the best choice is B, $739.36.

James Has a Credit Card with a Monthly Rate of 1.7