Question

Natasha had a $922.93 balance on her credit card at the beginning of September. Her credit card has an APR of 9.89%, compounded monthly, and a minimum monthly payment of 3.08% of the total balance. The following table shows Natasha’s credit card purchases over the next two months.
Month
Cost ($)
September
33.70
October
61.70
October
27.80
If Natasha makes only the minimum payments, what will her balance at the beginning of November? (Assume that the interest accrues before the monthly payment, and that the monthly payment occurs at the end of the month. Round all dollar values to the nearest cent.)

Answer 1

Answer:

Her balance at the beginning of November=$973.76

Step-by-step explanation:

What is Natasha's credit balance at the beginning of November?(i.e. at the end of October)

The balance at the end of each month is the beginning balance plus the current month's purchases minus the minimum payment for the month.

Sept =$922.93+$33.70+9.89%/12*($922.93+$33.70)

Sept=$964.51

payment= 964.51*3.08%

balance at the end of Sept=$964.51-($964.51*3.08%)

balance at the end of Sept=$934.80

Oct=$934.80+$61.70+9.89%/12*($934.80+$61.70)

Oct=$ 1,004.71

payment=$1,004.71*3.08%

balance at the end of Oct(at beginning of Nov)=$ 1,004.71-($1,004.71*3.08%)

balance at the end of Oct(at beginning of Nov)=$973.76

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