CREDIT CARDS by xumiaomaio

VIEWS: 7 PAGES: 10

									CREDIT CARDS

  7.2 Unpaid balance method for
  finance charge
Credit card: 7.2 Unpaid balance
method for finance charge          2/10


  Credit is NOT free
  When you do NOT pay off your entire
   balance, the company charges you a
   finance charge
  Based on your APR (annual percentage
   rate)
  Different ways to compute finance
   charges
Credit card: 7.2 Unpaid balance
method for finance charge                                      3/10


    Unpaid balance = Previous balance – (Payments + Credits)

    Finance charge = Unpaid balance x Periodic Rate
    New balance = Unpaid balance + finance charge + new purchases

    Step 1: Find the unpaid balance

    Step 2: Find the finance charge

    Step 3: Find the new balance
Credit card: 7.2 Unpaid balance
method for finance charge                4/10


    Ex. 1: Alicia has a charge account at
     Soccer’s R Us. The periodic rate is
     1.8%. If her previous balance is $475.00,
     she had payments and credits of
     $200.00 and she has a new purchase of
     $40.11, find the new balance.
Credit card: 7.2 Unpaid balance
method for finance charge                     5/10


  Ex. 1 cont.
 1. Find the unpaid balance
 Previous Balance – (Payments + Credits)
    $475.00         - ( 200.00) = 275.00
 2. Find the finance charge
 Unpaid Balance x Periodic rate
  275.00 x 0.018         = $4.95
 3. Find the new balance
 Unpaid Balance + Finance Charge + New Purchases
   275.00 + 4.95 + 40.11 = $320.06
Credit card: 7.2 Unpaid balance
method for finance charge               6/10


    Ex. 2: Cody has a previous balance of
     $1282.50. He made a payment of
     $175.00 and has a credit of $52.38. He
     makes new purchases of $62.75 and
     $13.65. Find his new balance if the
     periodic rate is 1.2%
Credit card: 7.2 Unpaid balance
method for finance charge                     7/10


   Ex. 2 cont.
 1. Find the unpaid balance
  Previous Balance – (Payments + Credits)
  1282.50 - ( 175.00 + 52.38) =
    1282.50 – 227.38              = $1055.12
 2. Find the finance charge
  Unpaid Balance x Periodic Rate
          1055.12 x 0.012 = $12.66144
 3. Find the new balance
  Unpaid Balance + Finance Charge + New Purchases
 1055.12 + 12.66 + ( 62.75 + 13.65) = $1144.18
Credit card: 7.2 Unpaid balance
method for finance charge                    8/10


    Ex. 3: In groups find the new balance. Show
     me the answer on your whiteboard.

  Shannon’s account statement has a previous
   balance of $623.72. She makes a payment of
   $20.00. She has new purchases of $429.68,
   $411.96 and $130.03. Her periodic rate is
   1.75%. What is her new balance?
  $1585.96
Credit card: 7.2 Unpaid balance
method for finance charge                     9/10


   Ex. 3 cont.
 1. Find the unpaid balance
  Previous balance – (Payments + Credits)
   $623.72 – ($20.00) = $603.72
 2. Find the finance charge
  Unpaid Balance x Periodic Rate
         $603.72 x 0.0175 = $10.5651
 3. Find the new balance
  Unpaid balance + Finance Charge + New purchases
   603.72 + 10.57 + (429.68 + 411.96 + 130.03) =
                                         $1585.96
Credit card: 7.2 Unpaid balance
method for finance charge           10/10



  HW 7.2 p. 262-263 # 1-5 & 13-18
  Make sure you have ALL parts for HW:
   a,b,c

  ANSWER COLUMN
  PROPER HEADING

								
To top