using the unpaid - balance method, find the current months finance charge on a credit card account having…

using the unpaid - balance method, find the current months finance charge on a credit card account having the following transactions. last months balance: $760. last payment: $50. annual interest rate: 18%. purchases: $305. returns: $998.

using the unpaid - balance method, find the current months finance charge on a credit card account having the following transactions. last months balance: $760. last payment: $50. annual interest rate: 18%. purchases: $305. returns: $998.

Answer

Explanation:

Step1: Calculate unpaid balance

Unpaid balance = Last month's balance - Last payment + Purchases - Returns Unpaid balance = $760 - 50+305 - 98$ Unpaid balance = $917$

Step2: Calculate monthly interest rate

Monthly interest rate = $\frac{Annual\ interest\ rate}{12}$ Monthly interest rate = $\frac{0.18}{12}=0.015$

Step3: Calculate finance charge

Finance charge = Unpaid balance × Monthly interest rate Finance charge = $917\times0.015 = 13.755\approx13.76$

Answer:

$13.76$