On the May 3 billing date Douglas had a balance due of 22821

On the May 3 billing date, Douglas had a balance due of $228.21 on his credit card. During the next month, Douglas charged an additional $271.06 and makes a payment of $166.88. The interest rate on the card is 1.5% per month. Using the previous balance method, find the new balance on June 3

Solution

On May, 3 billing date, Douglas had a balance due of $228.21 on his credit card which is required to be paid on or before the next billing date, i.e.June,3. Douglas paid $ 166.88 in the month after May, 3 so that interest would be charged on $ 228.21-$ 166.88 = $ 61.33. Interest @ 1.5 % per month on$ 61.33 is $ 61.33 * 1.5/100 = $ 0.92. In addition, there is a fresh charge of $ 271.06 in the next month so that the balance on Douglas’s credit card on June, 3 is $ 61.33+$ 0.92+$271.06 = $ 333.31.