Suppose you have a credit card balance of $500 that you were unable to pay off. During the current month you purchase another $250 worth of products. You made a payment during the grace period of $300
Assuming your retail credit card company charges an annual interest rate of 22%, compute your new balance.
A) $510
B) $250
C) $494
D) $454
Answer: D
Explanation: D)
Beginning balance: $500
Less payment: $300
Balance subject to interest $200
Interest ($200 × .22) $44
Current month's purchases $250
New balance $294
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