Question

Alexander has a previous balance of $982 on a credit card with a 19.2% APR compounded monthly. If he made a payment of $73 this month, what is the new balance on his credit card?

Answer 1

New balance is `$924.71` to 2 decimal places

Explanation:

APR is 19.2% `->19.2/100`
Split over 12 months this is `19.2/(12xx100) = 19.2/1200` per month

Note that we are considering only 1 payment cycle (the current one)

Using `P(1+x)^("months count") -> $982(1+19.2/1200)^1-$73=$924.712`

New balance is `$924.71` to 2 decimal places