628 CHAPTER 10 Consumer Mathematics 32. Credit Card Minimum Monthly Payment Evelyn’s credit card company determines her minimum monthly payment by adding all new interest to 2% of the outstanding principal. The credit card company charges an interest rate of 0.04238% per day. On September 15, Evelyn uses her credit card to purchase a new picture window for her house for $3200. She makes no other purchases during September. a) Assuming Evelyn had no new interest, determine Evelyn’s minimum payment due on October 1, her billing date. $64 b) On October 1, instead of making the minimum payment, Evelyn makes a payment of $1200. Assuming there are no additional charges or cash advances, determine Evelyn’s minimum payment due on November 1. $66.28, which rounds up to $67 33. Business Expenses Kevin’s credit card company determines his minimum monthly payment by adding all new interest to 1.5% of the outstanding principal. The credit card company charges an interest rate of 0.05163% per day. On November 12, Kevin used his credit card to pay for the following business expenses: van repairs ($677), equipment maintenance ($452), office supplies ($139), and dinner with clients ($141). a) Assuming Kevin had no new interest, determine his minimum payment due on December 1, his billing date. $21.14, which rounds up to $22 b) On December 1, instead of making his minimum payment, Kevin makes a payment of $300. Assuming there are no additional charges or cash advances, determine Kevin’s minimum payment on January 1. $34.39, which rounds up to $35 34. Vacation Expenses Harry’s credit card company determines his minimum monthly payment by adding all new interest to 2.5% of the outstanding principal. The credit card company charges an interest rate of 0.03164% per day. On August 21, while on vacation in Costa Rica, Harry used his credit card to pay for the following expenses: airfare ($359), car rental ($273), hotel ($653), meals ($315), and surfboard rental ($225). a) Assuming Harry had no new interest, determine Harry’s minimum payment due on September 1, his billing date. $45.63, which rounds up to $46 b) On September 1, instead of making his minimum payment, Harry makes a payment of $750. Assuming there are no additional charges or cash advances, determine Harry’s minimum payment on October 1. $37.08, which rounds up to $38 35. Previous Balance Method On the September 5 billing date, Tasia had a balance of $2302.65 on her credit card. From September 5 through October 5, Tasia charged an additional $106.72 and made a payment of $550. a) Determine the finance charge on October 5, using the previous balance method. The interest rate is 1.3% per month. $29.93 b) Determine the new balance due on October 5. $1889.30 36. Previous Balance Method On September 5, the billing date, Verna had a balance due of $567.20 on her credit card. The transactions during the following month were September 8 Payment $275.00 September 21 Charge: Airline ticket 330.00 September 27 Charge: Hotel bill 190.80 October 2 Charge: Clothing 84.75 a) Determine the finance charge on October 5, using the previous balance method. The interest rate is 1.1% per month.$6.24 b) Determine the new balance on October 5. $903.99 37. Previous Balance Method On February 3, the billing date, Carol Ann had a balance due of $124.78 on her credit card. Her bank charges an interest rate of 1.25% per month. She made the following transactions during the month. February 8 Charge: Art supplies $25.64 February 12 Payment 100.00 February 14 Charge: Flowers delivered 67.23 February 25 Charge: Music CD 13.90 a) Determine the finance charge on March 3, using the previous balance method. $1.56 b) Determine the new balance on March 3. $133.11 38. Previous Balance Method On April 15, the billing date, Gabrielle had a balance due of $57.88 on her credit card. She is redecorating her apartment and has the following transactions. April 16 Charge: Paint $64.75 April 20 Payment 45.00 May 3 Charge: Curtains 72.85 May 10 Charge: Chair 135.50 a) Determine the finance charge on May 15, using the previous balance method. Assume that the interest rate is 1.35% per month. $0.78 b) Determine the new balance on May 15. $286.76 39. Average Daily Balance Method The balance on the Razazadas’ credit card on May 12, their billing date, was $378.50. For the period ending June 12, they had the following transactions. May 13 Charge: Toys $129.79 May 15 Payment 50.00 June 1 Charge: Clothing 135.85 June 8 Charge: Housewares 37.63 Ground Picture/Shutterstock
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