Question

In: Finance

On April 1, the unpaid balance in an account was $218. A payment of $30 was...

On April 1, the unpaid balance in an account was $218. A payment of $30 was made on April 11. On April 21, a $40 purchase was made. The finance charge rate was 15% per month of the average daily balance. Find the new balance at the end of April.

Solutions

Expert Solution

Important Details:

On April 1, the unpaid balance was 218.
On April 11, a payment of 30 was made.
On April 21, a 40 purchase was made.

Balances summary
from April 1 to April 10, the unpaid balance was 218.
from April 11 to April 20, the unpaid balance was 218 - 30 = 188 ( As, 30 dollar deposit to the account was made)
from April 21 to April 30, the unpaid balance was 188 + 40 = 228 ( As, 40 dollar purchase was made)

Finding the total daily balance for the month and then dividing by the number of days in the month to compute the financial charge

The total balances were:

April 1 to April 10 is = 10 days X 218 = 2180.
April 11 to April 20 is = 10 days X 188 = 1880.
April 21 to April 30 is = 10 days X 228 = 2280.

The total is 6340, and now dividing it by 30 to get an average daily balance of 211.3333

So, the finance charge would be 0.15 x  211.3333 = 31.7

New Balance at the end of April = 228 + 31.7 = $259.70


Related Solutions

On April 1, the unpaid balance in an account was $214. A payment of $75 was...
On April 1, the unpaid balance in an account was $214. A payment of $75 was made on April 6. On April 24, a $27 purchase was made. The finance charge rate was 1.15% per month of the average daily balance. Find the new balnce at the end of April.
Find the monthly payment and estimate the remaining balance. Assume interest is on the unpaid balance....
Find the monthly payment and estimate the remaining balance. Assume interest is on the unpaid balance. 5​-year computer loan for ​$2483 at 6.7​%; remaining balance after 2 years. The monthly payment is ​$
The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The...
The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A. Checks outstanding totaled $61,280. B. A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $42,000 on a $40,000 note,...
The cash account for Norwegian Medical Co. at April 30 indicated a balance of $82,726. The...
The cash account for Norwegian Medical Co. at April 30 indicated a balance of $82,726. The bank statement indicated a balance of $128,040 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $34,090. b. A deposit of $18,430, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $31,779 on a $29,700 note,...
The cash account for Norwegian Medical Co. at April 30 indicated a balance of $89,775. The...
The cash account for Norwegian Medical Co. at April 30 indicated a balance of $89,775. The bank statement indicated a balance of $125,160 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $31,540. b. A deposit of $18,000, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $24,075 on a $22,500 note,...
The cash account for American Medical Co. at April 30 indicated a balance of $91,408. The...
The cash account for American Medical Co. at April 30 indicated a balance of $91,408. The bank statement indicated a balance of $126,590 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A. Checks outstanding totaled $33,700. B. A deposit of $18,900, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $22,042 on a $20,600 note,...
The cash account for American Medical Co. at April 30 indicated a balance of $91,408. The...
The cash account for American Medical Co. at April 30 indicated a balance of $91,408. The bank statement indicated a balance of $126,590 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A. Checks outstanding totaled $33,700. B. A deposit of $18,900, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $22,042 on a $20,600 note,...
The cash account for American Medical Co. at April 30 indicated a balance of $93,115. The...
The cash account for American Medical Co. at April 30 indicated a balance of $93,115. The bank statement indicated a balance of $125,800 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A. Checks outstanding totaled $30,060. B. A deposit of $19,240, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $24,075 on a $22,500 note,...
The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The...
The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A. Checks outstanding totaled $61,280. B. A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $42,000 on a $40,000 note,...
The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The...
The cash account for American Medical Co. at April 30 indicated a balance of $334,985. The bank statement indicated a balance of $388,600 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: A. Checks outstanding totaled $61,280. B. A deposit of $42,500, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $42,000 on a $40,000 note,...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT