If you are trying to build credit by using a credit card, each time you make a p

Question

If you are trying to build credit by using a credit card, each time you make a purchase with the credit card, deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full. Kathy Lehner is going to start doing this. She plans on paying her credit card bill in full this month. How much does she owe with a 12% APR and the following transactions? (Round your answer to the nearest cent.)

Amount owed            $ ?

31-day billing cycle 10/1 Previous balance $ 1,160 10/3 Credit $83 cr. 10/12 Charge: King Soopers $144 10/15 Payment $270 cr. 10/25 Charge: Delta $317 10/30 Charge: Holiday Fun $57

Explanation / Answer

The interest payable for the transaction amount shall have to be calculated, since the date outstanding for payment for each transaction

So total liability to be paid by Kathy Lehner is $2,048

So Amount Owed = $2048

Calculation of amount of Credit card to be paid Date Particulars Amount o/s No of days o/s Intrest calculation Amount payable 10/1 Previous Balance $1160 31 days $12 $1172 10/3 Credit $83 29 $1 $84 10/12 Charge : King Soopers $144 20 $1 $145 10/15 Payment $270 17 $2 $272 10/25 Charge: Delta $317 7 $1 $318 10/30 Charge: Holiday Fun $57 2 - $57 $2048

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