Business Mathematics Brief 12th Edition by Stanley Salzman ,Gary Clendenen, Charles Miller

Exercise 107

Find the finance charge on each of the following revolving charge accounts. Assume interest is calculated on the unpaid balance of the account. Round to the nearest cent.(See Example.)
Finding Finance Charge Using the Unpaid Balance Method
(a) Peter Brinkman's MasterCard account had an unpaid balance of $870.40 on November 1. During November, he made a payment of $100 and used the card to purchase a puppy costing $150 for his son. Find the finance charge and the unpaid balance on December 1 if the bank charges 1.5% per month on the unpaid balance.
A finance charge of 1.5% per month on the unpaid balance would be

Find the unpaid balance on December 1 as follows.

(b) During December, Brinkman made a payment of $50, charged $240.56 for Christmas presents, returned $35.45 worth of items, and took his family to dinner with charges of $92.45. Find his unpaid balance on January 1.
The finance charge calculated on the unpaid balance is $933.46 ×.015 = $14.00. The unpaid balance on January 1 follows.

The total finance charge during the 2-month period was $13.06 + $14.00 = $27.06.
(c) Brinkman knows that his debt is increasing. He moves the balance to another charge card that charges only.8% per month. Find his savings in finance charges for January.