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 9% APR and the following transactions? (Round your answer to the nearest cent.)

Amount owned?

31-day billing cycle 10/1 Previous balance $ 1,175 10/3 Credit $68 cr. 10/12 Charge: King Soopers $159 10/15 Payment $420 cr. 10/25 Charge: Delta $332 10/30 Charge: Holiday Fun $72

Explanation / Answer

A / 1 B C D E F G H 2 Billing Cycle=31 days 3 APR is 9% 4 Date Particulars Amount No of Days Overdue Interest 5 1-Oct Opening balance $1,175 2 $1,175 $0.58 =F5*9%/365*E5 6 3-Oct Credit ($68) 9 $1,107 $2.46 =F6*9%/365*E6 7 12-Oct Charge King Soopers $159 3 $1,107 $0.82 =F7*9%/365*E7 8 15-Oct Payment ($420) 10 $687 $1.69 =F8*9%/365*E8 9 25-Oct Charge Delta $332 5 $687 $0.85 =F9*9%/365*E9 10 30-Oct Charge Holiday Fun $72 1 $687 $0.17 =F10*9%/365*E10 11 Total: $1,250.00                  30 $6.57 12 Note: as the current month billings will have 31 days credit and hence not considered 13 As the billing will be on 31st, the payment can be made in full on 31st 14 15 Principal credit of opening balance          687.00 16 Add:Charges during the month          563.00 17 Add: Interest @9% APR               6.57 18 19 Total Payable:      1,256.57

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