Katie had an unpaid balance of $1,734.50 on her credit card statement at the beginning of January. She made a payment of $165.00 during the month. If the interest rate on Katie's credit card was 7% per month on the unpaid balance, find the finance charge and the new balance on February 1. I got 1679.33 but that is not one of the possible answers
math - Steve, Monday, January 16, 2012 at 11:22am
It sounds like you subtracted the $165 payment and then took 7% of the reduced balance.
However, what probably happens is that on the January statement, there was a finance charge of 7% on the $1734.50 unpaid, or $121.42
So, her $165 payment included $121.42 of interest, and only $43.58 of principal.
So, her balance on the next statement is $1690.92