You have a credit card with a balance of $1,187.92 and the interest is 12.25% APR. A late fee of $30.00 is charged for payments after the due date. You missed your payment due date, but plan to make a payment of $125.00 on the next due date. What will be the new principle after that payment?
a) $1,242.39
b) $1,105.05
c) $1,117.61
d) $1,062.92

The balance is $1187.92 with interest of 12.25%. Since you missed the due date, the new balance will be
1187.92 (1 + 0.1225/12) + 30 = $1230.05
During the next due date, you pay $125, so the new balance will be:
1230.05 (1 + 0.1225/12) - 125 = $1117.61

The answer is
C.

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dgsistemasp0pffb dgsistemasp0pffb · Answer 2 · 2019-08-19T22:22:48-04:00

Answer:

c) $1,117.61

Step-by-step explanation:

We assign the variables to the following data:

N = Number of months per year = 12

IB = Initial balance = $1,187.92

Rate = Interest Rate = 12.25% = 0.1225

LPC = Late Payment Charge = $30.00

B = Balance =?

PP = Planned payment = $125.00

NP = New principal =?

To calculate the balance after the late payment charge we can use the following equation:

$B=IB*(1+\frac{Rate}{N})+LPC$

$B=1,187.92*(1+\frac{0.1225}{12})+30.00$

B = 1,187.92 (1 + 0.01021) + 30.00

B = 1,187.92 (1,01021) + 30.00

B = 1,200.05 + 30.00

B = $1,230.05

Now we calculate the new principal using the following equation:

$NP=B*(1+\frac{Rate}{N})-PP$

$NP=1,230.05*(1+\frac{0.1225}{12})-125.00$

NP = 1,230.05 (1 + 0.01021) - 125.00

NP = 1,230.05 (1,01021) - 125.00

NP = 1,242.61 - 125.00

NP = $1,117.61

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I hope this helps!