07 Jan

You finance a $500 car repair completely on credit

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Question: You finance a $500 car repair completely on credit..

You finance a $500 car repair completely on credit, you will just pay the minimum payment each month for the next three months. The APR is 18.99% and the minimum payment each month is 4% of the balance. Determine the finance charge, new balance, and minimum payment required for each of the next two months, and the starting balance for month 2 in the table below (round to the nearest cent): 6 points

Month Starting balance Finance charge New balance Minimum payment
1 $500
2
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