Questions: The table below shows a summary of Martina's credit card statement for the month of May. Transaction types Amount Unpaid balance from April (Beginning balance on May 1) 1303.90 Payments made during the month of May 492.03 Purchases made during the month of May 288.15 Complete the parts below. Write your answer to the nearest cent. Answer Submitted: (a) Suppose the credit card company charges 1.6% monthly interest on the unpaid balance from April. How much interest will this be? 20.86 (b) What will Martina's unpaid balance be on her June 1 statement? (Assume that this balance will include the interest from part (a), but will not include any interest on her May balance yet.) 309.01

Solution Steps

To solve part (a), calculate the interest on the unpaid balance from April by multiplying the balance by the monthly interest rate (1.6%). For part (b), determine the unpaid balance on June 1 by adding the interest from part (a) to the unpaid balance from April, then subtracting the payments made during May, and finally adding the purchases made during May.

To find the interest charged on the unpaid balance from April, we use the formula: \[ \text{Interest} = \text{Unpaid Balance} \times \text{Monthly Interest Rate} \] Substituting the values: \[ \text{Interest} = 1303.90 \times 0.016 = 20.8624 \] Rounding to four significant digits, we have: \[ \text{Interest} \approx 20.86 \]

Next, we calculate the unpaid balance on the June 1 statement using the formula: \[ \text{Unpaid Balance on June 1} = \text{Unpaid Balance from April} + \text{Interest} - \text{Payments Made} + \text{Purchases Made} \] Substituting the values: \[ \text{Unpaid Balance on June 1} = 1303.90 + 20.8624 - 492.03 + 288.15 \] Calculating this gives: \[ \text{Unpaid Balance on June 1} \approx 1120.8824 \] Rounding to four significant digits, we have: \[ \text{Unpaid Balance on June 1} \approx 1120.88 \]

Final Answer