You have $1,998.00 on a credit card with a 14.5% APR. You miss your minimum payment the first month and there is a late fee of $37.00. How much is your balance at the beginning of the second month?
To find the balance at the beginning of the second month, we need to calculate the interest accrued on the balance for one month and add any fees or charges.
First, calculate the interest accrued on the balance for one month:
Interest = (Balance * APR) / 12
Interest = (1998.00 * 0.145) / 12
Interest = 23.05
Next, add the late fee to the balance:
Balance + Late fee = 1998.00 + 37.00
Balance + Late fee = 2035.00
Now, add the interest to the updated balance:
Balance at the beginning of the second month = Balance + Interest
Balance at the beginning of the second month = 2035.00 + 23.05
Balance at the beginning of the second month = 2058.05
Therefore, the balance at the beginning of the second month is $2,058.05.
are you sure
Apologies for the incorrect calculation earlier. Let's recalculate to make sure we get the accurate balance at the beginning of the second month.
Since the minimum payment was missed in the first month, we need to consider the interest accrued on the outstanding balance for that month, along with the late fee.
First, calculate the interest accrued on the outstanding balance for one month:
Interest = (Balance * APR) / 12
Interest = (1998.00 * 0.145) / 12
Interest = 24.43
Next, add the late fee to the balance:
Balance + Late fee = 1998.00 + 37.00
Balance + Late fee = 2035.00
Now, add the interest to the updated balance:
Balance at the beginning of the second month = Balance + Interest
Balance at the beginning of the second month = 2035.00 + 24.43
Balance at the beginning of the second month = 2059.43
Therefore, the balance at the beginning of the second month is $2,059.43.