Susan has a credit card with a monthly rate of 1.4%. The account applies the unpaid balance method. The unpaid balance for her Apr billing cycle is $415.20. During the billing cycle she made purchases of $189.36 returned items for $17.08, and made a payment of $60.00. Find the new balance.

Question

Quizplus · Accepted Answer

First, we need to calculate the finance charge for the month:
Finance charge = unpaid balance * monthly rate
Finance charge = $415.20 * 0.014
Finance charge = $5.81

Next, we need to calculate the total activity on the account:
Total activity = purchases - returns + payments
Total activity = $189.36 - $17.08 + $60.00
Total activity = $232.28

Now we can calculate the new balance:
New balance = unpaid balance + finance charge + total activity
New balance = $415.20 + $5.81 + $232.28
New balance = $653.29

Therefore the best choice is (C) $533.29.

Susan Has a Credit Card with a Monthly Rate of 1.4