Question

thomas owes $438 on his credit card and was unable to pay more than the minimum payment of $20. unfortunately he mailed the payment late resulting in a late fee of $39 the interest rate on this card is 26% compounded monthly. what will his new balance be?

Answer 1

Answer:

$575.82.

Explanation:

Since Thomas owes $ 438 on his credit card, but only paid the minimum of $ 20, his debt is now $ 418 (438 - 20). A late fee of $ 39 will be added to this value, which will raise said sum to $ 457 (418 + 39). In turn, the interest rate for unpaid card balances is 26% per month. Therefore, next month his balance will be $ 575.82 (457 x 1.26).