Question

You have a balance of $500 on a credit card with a monthly interest rate of 2%. You make a payment of $15 when you receive your credit card bill. What is the new balance after the payment?(1 point)
Responses

$475
$475

$525
$525

$505
$505

$495

Answer 1

To find the new balance after making a payment of $15 on the credit card, we need to first calculate the interest on the current balance and then subtract the payment.

Starting balance: $500
Monthly interest rate: 2%
Payment: $15

1. Calculate the interest for the month:
\[
\text{Interest} = \text{Balance} \times \text{Interest Rate} = 500 \times 0.02 = 10
\]

2. Add the interest to the current balance:
\[
\text{New Balance before payment} = \text{Initial Balance} + \text{Interest} = 500 + 10 = 510
\]

3. Subtract the payment from the new balance:
\[
\text{Final Balance} = \text{New Balance before payment} - \text{Payment} = 510 - 15 = 495
\]

Thus, the new balance after the payment is **$495**.