How do you find the interest and the new balance on these charge accounts?
Balance=$253.00, Payment=$12.65, Unpaid Balance=$12.63, Interest Rate per Month=1.6%, Interest= , New Balance=
Not clear what balance and unpaid balance are.
Usually statements give unpaid balance (from last month), minus the payments, add purchases to get the new balance. Is $253 the new balance?
Also, charge accounts usually charge interest by the day. How does this account work if no days are specified?
To find the interest and the new balance on the charge accounts, we can follow these steps:
1. Calculate the interest:
- Convert the interest rate from a percentage to a decimal by dividing it by 100. In this case, the interest rate per month is 1.6%, so the decimal form is 0.016.
- Multiply the unpaid balance by the interest rate to find the interest. In this case, the unpaid balance is $12.63, so the interest is 12.63 * 0.016 = $0.20208 (rounded to five decimal places).
2. Calculate the new balance:
- Subtract the payment from the previous balance. In this case, the balance is $253.00 and the payment is $12.65, so the new balance before adding interest is 253.00 - 12.65 = $240.35.
- Add the interest to the new balance to find the updated balance. In this case, the interest is $0.20208, so the new balance is 240.35 + 0.20208 = $240.55208 (rounded to five decimal places).
Therefore, the interest is $0.20208 and the new balance is $240.55208.