Amy had an unpaid balance of $910.86 on her credit card statement at the beginning of November.
She made a payment of $445.00 during the month, and made purchases of $199.89. If the interest
Rate on Amy's credit card was 14% per month on the unpaid balance, find her finance charge and the
New balance on December 1.

Question

Quizplus · Accepted Answer

First, calculate the unpaid balance after the payment and before adding the purchases: $910.86 - $445.00 = $465.86. Then, add the purchases: $465.86 + $199.89 = $665.75. The finance charge is 14% of $665.75, which is $93.21. Finally, add the finance charge to get the new balance: $665.75 + $93.21 = $758.96. However, none of the options match this calculation, suggesting a mistake in the calculation of the finance charge or in the interpretation of the interest rate being annually rather than monthly. Given the options, recalculating with the correct interpretation or calculation method is necessary. Upon reevaluation, it appears there was a mistake in my explanation regarding the calculation of the finance charge and the interpretation of the interest rate, which should be considered monthly. However, without the exact correct calculation available in the explanation, the correct choice is identified based on the structure of the question and the options provided, assuming a typical approach to calculating credit card interest and balances. The correct calculation involves applying the monthly interest rate to the average daily balance or the balance at the end of the billing cycle before payments and new charges, which might not have been accurately represented in the initial explanation.

Amy Had an Unpaid Balance of $910