Solutions to Section 7.1

Prob# Billing Date

Previous Balance

FinanceCharge

NewPurchases

PaymentsCredits

NewBalance

3 8/15 $ 600 $ 9 $ 140 $ 100 $ 649

4 1/22 $ 410.75 $ 7.20 $ 175 $ 150 $ 442.95

5 3/1 $ 450.95 $ 6.75 $ 39.95 $ 160 $ 337.65

6 9/4 $ 233.23 $ 2.33 $ 40.36 $ 133.23 $ 142.69

7 6/15 $ 675.19 - $ 416.34 $ 675.19 $ 416.34

8 8/1 $ 2494.21 $ 43.65 $ 137.25 $ 450 $ 2225.11

Problem # Previous Balance

FinanceCharge

NewPurchases

PaymentsCredits

NewBalance

1 $ 600 $ 7.50 $ 90 $ 100 $ 597.502 $ 278.75 $ 4.18 $ 35.85 $ 48 $ 270.78

9. $ 1809.3010. $ 299.9711. $ 182.0912. $ 679.5813. Payments = $109.90, New Purchases =

$188.73, New Balance = $369.0414. $ 2494.20

15. $ 634.10 16. $ 405.14 17. $ 349.63

18. 35.26 hours

Questions???

Solutions to Section 7.2

Prob# PreviousBalance

PaymentsCredits

UnpaidBalance

FinanceCharge

NewPurchases

NewBalance

1 $ 600 $ 100 $ 500 $ 7.50 $ 70 $ 577.50

2 $ 220 $ 150 $ 70 $ 1.05 $ 95 $ 166.05

Concept Check Problems

3. Unpaid Balance = $ 761.67 Previous Balance = $ 1111.67 New Balance = $ 1036.23

4. Monthly Rate = 1.90 %

Prob# PreviousBalance

PaymentsCredits

UnpaidBalance

FinanceCharge

NewPurchases

NewBalance

5 $ 350 $ 75 $ 275 $ 4.13 $ 90 $ 369.13

6 $ 125 $ 45.50 $ 80 $ 1.20 $ 42.50 $ 123.70

7 $ 437.50 $ 57.50 $ 380 $ 5.70 $ 222.50 $ 608.20

8. $ 1197.28

9. $ 981.90

Prob#

PreviousBalance

PaymentsCredits

UnpaidBalance

FinanceCharge

NewPurchases

NewBalance

10 $ 419.29 $ 45 $ 374.29 $ 7.49 $ 79.31 $ 461.09

11 $ 556.71 $147.55 $ 409.16 $ 5.11 $ 21.64 $ 435.91

12 $ 411.89

13. Unpaid Balance = $ 974.44 Previous Balance = $ 1224.44 New Balance = $ 1368.88

14. $ 497.58

15. $ 410.93

16. $ 29.69

Spiral Review

Questions???

Solutions to Section 7.3

Concept Check ProblemsProb # Dates Payment Purchase End-of-Day

BalanceNumberOf Days

Sum ofBalances

1 9/9 – 9/15

$ 500 7 $ 3500

2 9/16 $ 100 $ 600 1 $ 600

3 9/17 – 9/21

$ 600 5 $ 3000

4 9/22 $ 150 $ 450 1 $ 450

5 9/23 – 10/8

$ 450 16 $ 7200

6 TOTAL 30 $ 14750

Sum of Balances Number of Days Average Daily Balance

7 $ 14750 30 $491.67

Concept Check Problems

8. Finance Charge = $ 7.38

9. Unpaid Balance = $ 350

10. New Balance = 457.38

11. $ 1680

Prob # Dates Payment Purchase End-of-DayBalance

NumberOf Days

Sum ofBalances

12 9/6 – 9/17

$ 600 12 $ 7200

13 9/18 $ 140 $ 740 1 $ 740

14 9/19 – 9/24

$ 740 6 $ 4440

15 9/25 $ 120 $ 620 1 $ 620

16 9/26 – 10/5

$ 620 10 $ 6200

17 TOTAL 30 $ 19200

Sum of Balances Number of Days Average Daily Balance

18 $ 19200 30 $ 640

Reference PostingDate

TransactionDate

Description Purchases& Advances

Payments& Credits

1037485 4/11 Payment $ 40

4500298 4/15 4/01 Menswear $ 39.95

5473390 4/23 4/21 Housewares $ 15.99

1374655 4/25 Payment $ 50

BillingPeriod

PreviousBalance

PeriodicRate

Average DailyBalance

FinanceCharge

4/1 – 4/30 $ 175 1.2 % $ 163.90 $ 1.97

Payments& Credits

Purchases&

Advances

NewBalance

MinimumPayment

PaymentDue

$ 90 $ 55.94 $ 142.91 $ 25 $ 25

20a. Average = $ 113.57 Finance Charge = $ 1.36

21. 2.5999% = 2.6%

Questions???