Question

You have $2,675.00 on a credit card with a 15.75% APR. You miss your minimum payment and there is a late fee of $29.00. How much is your balance at the beginning of the second month?
(1 point)
Responses

$2,814.31
$2,814.31

$2,739.11
$2,739.11

$3,125.31
$3,125.31

$2,710.11

Answer 1

To calculate your balance at the beginning of the second month after missing your minimum payment, we need to consider the following:

1. **Initial balance**: $2,675.00
2. **APR**: 15.75%
3. **Monthly interest rate**: 15.75% / 12 = 1.3125%
4. **Late fee**: $29.00

**Step 1: Calculate the monthly interest**:
\[
\text{Interest} = \text{Initial balance} \times \frac{\text{APR}}{12}
\]
\[
\text{Interest} = 2,675.00 \times \frac{15.75}{100 \times 12} \approx 2,675.00 \times 0.0129375 \approx 34.58
\]

**Step 2: Add the late fee**:
\[
\text{New balance} = \text{Initial balance} + \text{Interest} + \text{Late fee}
\]
\[
\text{New balance} = 2,675.00 + 34.58 + 29.00 \approx 2,738.58
\]

**Rounding**, the approximate new balance at the beginning of the second month is about **$2,738.58**, but it's usually rounded to two decimal places as cents for transactions.

None of the given options perfectly match this calculation, but the closest and the only one that can account for slight variations or differences in rounding is:

**$2,739.11**.

So, the answer is: **$2,739.11**.