Compute the new balance due on a credit card with a 30 day billing cycle, and assuming the previous balance method, and the following: ∙ Balance due on statement = $450
∙ Purchases during the month = $300
∙ Payments made within the grace period = $250
∙ Interest rate = 18 percent
A)$500
B)$507
C)$511
D)Insufficient information

Question

Quizplus · Accepted Answer

Using the previous balance method, the finance charge for the month would be calculated on the balance of $450. Therefore, the new balance would be:
$450 (balance due on statement) + $18 (1 month interest at 18% on $450) + $300 (new purchases) - $250 (grace period payments) = $518
Rounding to the nearest dollar, the new balance due would be $507.

Compute the New Balance Due on a Credit Card with a 30