Question

You owe $1,455.69 on a credit card at a 12.8% APR. You pay 15 days after the due date and the late fee is $35.00, making it 45 days of accrued interest. You pay $250.00. How much is your balance after the payment?

Answer 1

is late fee a monthly fee?

Answer 2

That's what I am confused on. I am not sure if it is only a one time fee o you have to do it more than once. I also do not get the 45 days part either

Answer 3

i not 100% sure but i'd go like this. and it is simplest way i know how

1455.69 +1455.69*.128+35-250= new balance
what you owe+ interest + late fee - payment= new balance

Answer 4

assuming it is all based on a monthly basis

Answer 5

What is the first $1455.69 for?

Answer 6

current balance/ original balance

Answer 7

Okay, I get what you are doing, but what is the 45 days for ? Do I need to somehow divide or do something with it? Like I thought maybe 1455.69*12.8%*45/365 or something like tht bcz I remember doing some sort of similar problem like that a while back. Idk just throwing it out there lol

Answer 8

nah i dont think so. I think 45 days is not enought to constitue 2 months of being late. Assuming it is all monthly based tho

Answer 9

Okay so pretty much just do the balance times the interest then add those together...then add the $35 in then subtract the 200?

Answer 10

sorry i have horrid spelling.

Answer 11

250

Answer 12

250 yeah.. and your fine, I can understand you lol.

Answer 13

also plz dbl check with a financial guy. I am not the financial math type :P

Answer 14

Okay I ill do that. Than you so much for trying to help me!

Answer 15

dont thank me till you get an A :D

Answer 16

lol alright, but thanks for taking the time to try and help me. I appreciate it

Answer 17

You owe $1,455.69 on a credit card at a 12.8% APR

The annual rate is 12.8%, so the monthly rate is 12.8/12 = 1.0666% (roughly)

If you start with $1,455.69 as the outstanding balance at the beginning of the month, then 30 days later, you'll have 1455.69 + 1455.69*0.010666*1 = 1471.22 dollars as the outstanding balance (assuming 30 days in a month)

However, you don't make the payment until 15 days after the due date, so you've been accruing interest for 30+15 = 45 days.

Your outstanding balance will be 1455.69 + 1455.69*0.010666*(45/30) = 1,478.98 dollars. The 45/30 is the time in months

Then you add on the late fee of $35 to get 1,478.98+35 = 1,513.98 dollars

This is the balance before you make the payment

After making the $250 payment your balance drops to 1,513.97 - 250 = 1,263.98 dollars

Answer 18

The only part that might be tricky is *when* the late fee is applied. It could be applied when the payment is made or when the due date is missed. It's probably when the due date is missed, so you'd accrue interest for 30 days, slap on the late fee, then acrue on 15 more days of interest until you make that $250 payment

Answer 19

i'd go with jim on this one