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15 May, 07:09

The account balance on April 1st is $102.33. On April 15th a payment of $25.00 is made. On April 25th a purchase of $11.27 is made. What is the finance charge if the annual rate is 22%? What is the new account balance?

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  1. 15 May, 07:30
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    Finance Charge = $1.42

    New Account Balance = $90.02

    Step-by-step explanation:

    APR (Annual Percentage Rate) = 22%

    Periodic Rate = 1.83% (APR/12)

    Beginning Balance = $102.33

    Payment made on 15th day = $25.00

    Purchase made on 25th day = $11.27

    Finance Charge = (Beginning Balance - Payment made on 15th day) x Periodic Rate

    Finance Charge = ($102.33 - $25.00) x 0.0183

    Finance Charge = $77.33 x 0.0183

    Finance Charge = $1.42

    New Account Balance = Beginning Balance - Payment made on 15th day + Purchase made on 25th day + Finance Charge

    New Account Balance = $102.33 - $25.00 + $11.27 + $1.42

    New Account Balance = $90.02
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