To solve the problem of determining the amount of money on which Jeremiah will be charged interest for month 8, we need to understand how the credit card interest is calculated based on the previous month's balance.
According to the problem, the Annual Percentage Rate (APR) is 22% and the interest is calculated on the previous monthly balance.
The key points to focus on for determining the correct amount are:
1. The interest for month 8 is based on the balance at the end of month 7.
2. We need to find the balance at the end of month 7, as this balance will be used to calculate the interest for month 8.
Looking at the table provided:
At the end of month 7:
- The previous balance was \[tex]$460.64
- New charges were \$[/tex]301.48
- Payment received was \[tex]$220.00
- Finance charges for that month were \$[/tex]8.45
- Principal paid was \[tex]$211.55
- The new balance was \$[/tex]550.57
From the above information, the balance at the end of month 7 is \[tex]$550.57.
Therefore, the amount of money on which Jeremiah will be charged interest for month 8 is:
B. \$[/tex]550.57
