Problem
On July 12, the billing date, Marvin Zug had a balance due of $\$ 293.97$ on his credit card. His card charges an interest rate of $1.25 \%$ per month. The transiactions he made are to the right. a) Find the finance charge on August 12, using the provious balance method. b) Find the new balance on August 12. Marvin made the following transactions during the month. \begin{tabular}{llr} July 13 & Charge: & $\$ 39.02$ \\ & Office supplies \\ July 15 & Charge: Scart & $\$ 14.27$ \\ July 21 & Payment & $\$ 110.00$ \\ July 23 & Charge: & $\$ 93.23$ \\ & Toy truck \end{tabular} a) The finance charge on August 12 is $\$ 3.67$ (Round to the nearest cent as needed) b) The new balance on August 12 is $\$$. (Round to the nearest cent as needed)
Solution
Step 1 ：Calculate the finance charge by multiplying the balance due on July 12 by the monthly interest rate: \(293.97 \times \frac{1.25}{100} = 3.67\)
Step 2 ：Calculate the new balance on August 12 by adding the finance charge to the balance due on July 12, then adding the charges made during the month and subtracting any payments made: \((293.97 + 3.67) + ((39.02 + 14.27 + 93.23) - 110.00) = 334.16\)
Step 3 ：\(\boxed{334.16}\) is the new balance on August 12.
