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9 June, 13:21

Peggy Andrews has a charge account at Davis Jewelers, which uses the unpaid-balance method of computing finance charges. The periodic rate is 1.75 percent. Andrews' previous balance is $9,472.08. She had payments and credits of $250.00. Andrews had $45.00 in new purchases. What is the new account balance?

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  1. 9 June, 14:04
    0
    Answer: New account balance = $9,428.47

    Explanation:

    Given the following;

    Andrew's Account Details at Davis jewelers:

    Previous account balance = $9,472.08

    Payment and credit = $250.00

    New purchase = $45.00

    Periodic rate = 1.75%

    Using the unpaid balance method, Andrew's account balance can be calculated thus;

    Unpaid balance = (previous balance - payment and credit balance)

    Unpaid balance = $ (9,472.08 - 250) = $9222.08

    Interest is charged on unpaid balance:

    0.0175 * $9222.08 = $161.39

    Therefore, new account balance:

    Unpaid balance + interest amount + new purchase

    $ (9,222.08 + 161.39 + 45) = $9,428.47
  2. 9 June, 17:06
    0
    Therefore the new account balance is $9428.47

    Explanation:

    Given that:

    Peggy Andrews has a charge account at Davis Jewelers, which uses the unpaid-balance method of computing finance charges.

    The periodic rate = 1.75%

    Andrews' previous balance = $9,472.08

    Andrews credit payments = $250

    Andrews new purchases = $45

    To get the unpaid balance, we subtract Andrews credit payments from her previous balance.

    Therefore the unpaid balance = $9472.08 - $250 = $9222.08

    Periodic rate = 1.75% of unpaid balance = 0.0175 * $9222.08 = $161.39

    The new account balance = unpaid balance + periodic rate + payments and credits = $9222.08 + $161.9 + $45 = $9428.47

    Therefore the new account balance is $9428.47
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