You start with a balance of $2,065.00 on a credit card at a 17.25% APR. If you have made no payments for 5 months, what is the new balance at the end of the fifth month? (1 point) Responses $2,094.68 $2,094.68 $2,213.42 $2,213.42 $2,421.21 $2,421.21 $2,077.37
To calculate the new balance at the end of the fifth month, we need to take into account the interest accrued during this time. The formula for calculating interest is:
Interest = Principal * (Rate/12) * Time
where Rate is the annual percentage rate and Time is the number of months. Plugging in the values, we have:
Interest = $2,065.00 * (0.1725/12) * 5
= $2,065.00 * 0.014375 * 5
= $147.97
Adding the interest to the original balance, we get:
New balance = $2,065.00 + $147.97
= $2,212.97
Therefore, the new balance at the end of the fifth month is $2,212.97. However, this does not match any of the given answer options.