New
Abraham's credit card has an APR of 13%, calculated on the previous monthly
balance, and Abraham makes a payment of $50 every month. His credit card
record for the last 7 months is shown in the table below.
End of Previous
Payment Finance Principal New
month
balance charges received charges
paid balance
$0.00
$41.00 $0.00
$0.00
$0.00 $41.00
2
$41.00 $229.00 $50.00
$49.56 $220.44
3
$220.44 $71.00
$50.00
$2.39 $47.61 $243.83
4
$243.83 $23.00 $50.00
$2.64 $47.36
$219.47
$219.47 $145.00 $50.00
$2.38
$47.62 $316.85
$316.85 $333.00 $50.00
$3.43
$46.57 $603.28
$603.28 $78.00 $50.00
$6.54 $43.46 $637.82
1
?
What were the finance charges in month 2?
A. $0