The unpaid balance of Dave's credit card is $295, and the finance charge is 4%; what is the new balance of the credit card including Dave's additional purchase of $75?

A) $382.80
B) $381.80
C) $ 306.80
D)$ 370
IS A?THANK YOU:)))

I got a different answer.

(295 * 1.04) + 75 = ?

Assuming finance is 4% per month (48% p.a., illegal in some provinces)

$295*4%+75
=$381.80

However, the calculation of interest charges on a credit card is not that simple. Usually when the client does not pay by the deadline, interest is calculated as of the purchase date, which can be anything from 1 to 3 weeks prior to the expiry date.

thank you :)))))

To find the new balance of Dave's credit card, we need to calculate the finance charge, add it to the unpaid balance, and then add the additional purchase.

1. Calculate the finance charge: Multiply the unpaid balance by the finance charge rate (4%) and convert it to dollars.
Finance Charge = Unpaid Balance * (Finance Charge Rate / 100)
Finance Charge = $295 * (4/100)
Finance Charge = $11.80

2. Add the finance charge to the unpaid balance:
New Balance = Unpaid Balance + Finance Charge
New Balance = $295 + $11.80
New Balance = $306.80

3. Add the additional purchase to the new balance:
New Balance = New Balance + Additional Purchase
New Balance = $306.80 + $75
New Balance = $381.80

Therefore, the new balance of Dave's credit card, including the additional purchase of $75, is $381.80, which corresponds to answer choice B).