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Mario's current credit card balance is $2,109.65 with a minimum payment of $68.00. Over the next month, he plans to spend $471.00. If the APR is 31.99%, what will Mario's new balance be, including interest?

$2,512.65
$2,897.25
$2,579.63
$2,784.32



Answer :

Mario's new credit balance including interest is $2579.63

Given,

Mario's current credit balance = $2,109.65

Minimum payment amount = $68.00

The amount Mario plans to spend over the next month = $471.00

APR = 31.99%

We have to find the new balance including interest.

Monthly interest rate on credit card = APR/12 = (31.99%/12)

The credit balance before interest = (current balance) + (expense for next month) - (minimum payment)

= 2109.65 + 471 - 68

= $2512.65

The credit balance after interest = 2512.65 ×   (1 + 0.3199/12) = $2579.63

That is,

Mario's new credit balance including interest is $2579.63

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