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?
After the first month's payment was made, Scott still owed $368. On his next payment, he would have had a balance due of $368 PLUS 1.75% of $368.
You do the numbers.
To find the total amount due on the second statement, we need to calculate the finance charge for the unpaid balance.
Step 1: Calculate the unpaid balance.
The unpaid balance is the remaining amount after the first month's payment.
Unpaid balance = Total purchase - First month payment
Unpaid balance = $568 - $200
Unpaid balance = $368
Step 2: Calculate the finance charge.
Finance charge = Unpaid balance * Monthly finance rate
Monthly finance rate = 1.75% = 0.0175
Finance charge = $368 * 0.0175
Finance charge = $6.44 (rounded to the nearest cent)
Step 3: Calculate total amount due on the second statement.
Total amount due = Unpaid balance + Finance charge
Total amount due = $368 + $6.44
Total amount due = $374.44
Therefore, the total amount due on the second statement is $374.44.
To find the total amount due on the second statement, we need to calculate the finance charge for the second month and add it to the unpaid balance.
Step 1: Calculate the unpaid balance
The unpaid balance is the original purchase amount minus the payment made in the first month. In this case, the unpaid balance is $568 - $200 = $368.
Step 2: Calculate the finance charge
The finance charge is calculated using the monthly finance rate and the unpaid balance. The monthly finance rate is 1.75% or 0.0175 (in decimal form). To calculate the finance charge, multiply the unpaid balance by the monthly finance rate: $368 * 0.0175 = $6.44.
Step 3: Add the finance charge to the unpaid balance
The total amount due on the second statement is the sum of the unpaid balance and the finance charge: $368 + $6.44 = $374.44.
Therefore, the total amount due on the second statement is $374.44.