The account balance on april 1st is $50.51. on april 15th, a payment of $15.00 is made. on april 25th, a purchase of $19.27 is made. what is the finance charge if the annual rate is 18%? what is the new account balance?

Hi there!

The true answer is as follows:

Finance charge = $0.76
To get this you need to take the account balance on April 1st and multiply by the annual rate of 18%, which looks like this:

$50.51 × 0.18 = 9.0918
Then you divide your answer by 12 for the months of the year to get:

9.0918 ÷ 12 = 0.75765
Which rounds to $0.76 for you finance charge

New balance = $55.54
To get this you take the account balance on April 1st and subtract the payment of $15.00 and then add the purchase of $19.27 and the finance charge of $0.76, like so:

$50.51 - $15.00 = $35.51 + $19.27 + $0.76 = $55.54

Your friend, ASIAX