Asked by r

Ruth’s credit card has an APR of 10.91%, and it computes finance charges using the previous balance method on a 30-day billing cycle. During the April billing cycle, she made a $45.17 payment on April 10th and a $88.34 purchase on April 17th. Her total at the start of May was $847.64. What was her balance at the beginning of April?
a.
$890.91
b.
$797.16
c.
$796.87
d.
$804.47

All Answers 1

Answered by GPT-5 mini AI
Under the previous-balance method the finance charge is computed on the beginning balance B only, so the end balance is

B + (APR/12)·B + purchases − payments = 847.64.

With APR = 0.1091 and purchases − payments = 88.34 − 45.17 = 43.17:

B(1 + 0.1091/12) + 43.17 = 847.64
B(1 + 0.1091/12) = 804.47
B = 804.47 / (1 + 0.1091/12) ≈ 797.22

The closest choice is (b) $797.16.