Calculate the finance charge and new balance using the previous balance method.
Previous balance = $179.32
Annual rate = 16%
Finance charge =
New purchases = $117.42
Payments/credits = $85.00
New balance =
To calculate the finance charge using the previous balance method, we use the formula:
Finance Charge = (Previous Balance x Annual Rate) / 365
Given:
Previous Balance = $179.32
Annual Rate = 16%
First, we need to convert the annual rate to a daily rate by dividing it by 365:
Daily Rate = 16% / 365 = 0.0004384
Next, we can calculate the finance charge by multiplying the previous balance by the daily rate:
Finance Charge = $179.32 x 0.0004384 = $0.0786
Now, let's calculate the new balance using the previous balance method:
New Balance = Previous Balance + Finance Charge + New Purchases - Payments/Credits
Given:
Previous Balance = $179.32
Finance Charge = $0.0786
New Purchases = $117.42
Payments/Credits = $85.00
New Balance = $179.32 + $0.0786 + $117.42 - $85.00
New Balance = $211.82
Therefore, the finance charge is $0.0786 and the new balance is $211.82.
To calculate the finance charge using the previous balance method, we need to multiply the previous balance by the annual interest rate.
Finance charge = Previous balance x Annual rate
Finance charge = $179.32 x 16% = $28.71 (rounded to the nearest cent)
To calculate the new balance, we need to add the previous balance, new purchases, and finance charge, and then subtract any payments or credits.
New balance = Previous balance + New purchases + Finance charge - Payments/credits
New balance = $179.32 + $117.42 + $28.71 - $85.00
New balance = $240.45 (rounded to the nearest cent)
Therefore, the finance charge is $28.71 and the new balance is $240.45.
Finance charge = .16($179.32) = ?
Add previous balance, fiance charge and new purchases and subtract credits.