Question

To help fund his start-up business, Marc charged $400 worth of goods on his credit card. On his first bill, he was not charged any interest and he made a payment of $20. He then charged another $18 worth of goods. On his second bill a month later, he was charged 2 percent interest on his entire unpaid balance. How much interest was Marc charged on his second bill?

Answer 1

Answer:

$7.96

Explanation:

the first month's principal balance = $400 (initial purchase) - $20 (first payment) = $380

the second month's principal balance = $380 (carried over) + $18 (second purchase) = $398

the interest charged on the second month's principal = $398 x 2% = $7.96

Answer 2

Answer:

$7.96

Explanation:

400-20+18 = 398

2% of 398

2/100 × 398 = 7.96