Answer:
c) $1,117.61
Step-by-step explanation:
We assign the variables to the following data:
N = Number of months per year = 12
IB = Initial balance = $1,187.92
Rate = Interest Rate = 12.25% = 0.1225
LPC = Late Payment Charge = $30.00
B = Balance =?
PP = Planned payment = $125.00
NP = New principal =?
To calculate the balance after the late payment charge we can use the following equation:
![B=IB*(1+\frac{Rate}{N})+LPC](https://tex.z-dn.net/?f=B%3DIB%2A%281%2B%5Cfrac%7BRate%7D%7BN%7D%29%2BLPC)
![B=1,187.92*(1+\frac{0.1225}{12})+30.00](https://tex.z-dn.net/?f=B%3D1%2C187.92%2A%281%2B%5Cfrac%7B0.1225%7D%7B12%7D%29%2B30.00)
B = 1,187.92 * (1 + 0.01021) + 30.00
B = 1,187.92 * (1,01021) + 30.00
B = 1,200.05 + 30.00
B = $1,230.05
Now we calculate the new principal using the following equation:
![NP=B*(1+\frac{Rate}{N})-PP](https://tex.z-dn.net/?f=NP%3DB%2A%281%2B%5Cfrac%7BRate%7D%7BN%7D%29-PP)
![NP=1,230.05*(1+\frac{0.1225}{12})-125.00](https://tex.z-dn.net/?f=NP%3D1%2C230.05%2A%281%2B%5Cfrac%7B0.1225%7D%7B12%7D%29-125.00)
NP = 1,230.05 * (1 + 0.01021) - 125.00
NP = 1,230.05 * (1,01021) - 125.00
NP = 1,242.61 - 125.00
NP = $1,117.61
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I hope this helps!