Isabel has a previous balance of $872 on a credit card with a 17.8% APR compounded monthly. If she made a payment of $50 this month, what is the new balance on her credit card?

Question

NOCH · Answer

First calculate the interest
Interest=previous balance×interest rate

You divide the interest rate by 12 months to find the interest For only one month

Also convert the interest rate into decimal form
17.8/100= 0.178

Interest=822×(0.178÷12months)
Interest=12.19

New balance
Previous balance+interest-payment
New balance=872+12.93−50=834.93
your answer is: 834.93