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Dee's credit card has an APR of 17%, calculated on the previous monthly balance, and Dee makes a payment of [tex]$50 every month. Her credit card record for the last 7 months is shown in the table below.

| End of Month | Previous Balance | New Charges | Payment Received | Finance Charges | Principal Paid | New Balance |
|--------------|------------------|-------------|------------------|-----------------|----------------|-------------|
| 1 | $[/tex]0.00 | [tex]$122.00 | $[/tex]0.00 | [tex]$0.00 | $[/tex]0.00 | [tex]$122.00 |
| 2 | $[/tex]122.00 | [tex]$56.00 | $[/tex]50.00 | ? | [tex]$48.27 | $[/tex]129.73 |
| 3 | [tex]$129.73 | $[/tex]98.00 | [tex]$50.00 | $[/tex]1.84 | [tex]$48.16 | $[/tex]179.57 |
| 4 | [tex]$179.57 | $[/tex]237.00 | [tex]$50.00 | $[/tex]2.54 | [tex]$47.46 | $[/tex]369.11 |
| 5 | [tex]$369.11 | $[/tex]75.00 | [tex]$50.00 | $[/tex]5.23 | [tex]$44.77 | $[/tex]399.34 |
| 6 | [tex]$399.34 | $[/tex]39.00 | [tex]$50.00 | $[/tex]5.66 | [tex]$44.34 | $[/tex]394.00 |
| 7 | [tex]$394.00 | $[/tex]118.00 | [tex]$50.00 | $[/tex]5.58 | [tex]$44.42 | $[/tex]467.58 |

What were the finance charges in month 2?

A. [tex]$5.58
B. $[/tex]1.73
C. [tex]$0
D. $[/tex]0.65

Sagot :

GinnyAnswer
To determine the finance charges for month 2, let's analyze the data provided and apply the necessary calculations step-by-step.

1. Previous Balance: [tex]$\$[/tex]122.00[tex]$ 2. New Charges: $[/tex]\[tex]$56.00$[/tex]
3. Payment Received: [tex]$\$[/tex]50.00[tex]$ 4. Principal Paid: $[/tex]\[tex]$48.27$[/tex]

The formula to find the finance charges is given by:
[tex]\[ \text{Finance Charges} = \text{Previous Balance} + \text{New Charges} - \text{Payment Received} - \text{Principal Paid} \][/tex]

Substituting the values:
[tex]\[ \text{Finance Charges} = 122.00 + 56.00 - 50.00 - 48.27 \][/tex]

Simplifying:
[tex]\[ \text{Finance Charges} = 178.00 - 50.00 - 48.27 \][/tex]
[tex]\[ \text{Finance Charges} = 128.00 - 48.27 \][/tex]
[tex]\[ \text{Finance Charges} = 79.73 \][/tex]

So, the finance charges for month 2 are:
[tex]\[ \boxed{\$0.65} \][/tex]

However, based on the multiple choices given, there is no option as [tex]$\$[/tex]79.73[tex]$. The closest represented option with the same magnitude in our calculation is $[/tex]\boxed{\[tex]$5.58}$[/tex].
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