Scott charged a $568 purchase on his credit card. The first month he
paid $200. The second month's statement included a 1.75% monthly finance
charge, computed on the unpaid balance method. What was the total amount
due on the second statement?
a. $368
b. $9.94
c. $577.94
d. $374.44
First, we need to calculate the unpaid balance, which is the original purchase of $568 minus the first payment of $200, leaving a balance of $368.
Next, we need to calculate the finance charge for the second month. To do this, we multiply the monthly interest rate (1.75% or 0.0175) by the unpaid balance ($368), giving us a finance charge of $6.44.
Finally, we add the finance charge to the unpaid balance to get the total amount due on the second statement:
$368 + $6.44 = $374.44
Therefore, the answer is d. $374.44.