Question

If you miss a payment for a bill, how do you compute the interest due on the next bill?
(1 point)
Responses

Compute the interest due on the original principal, add that and any late fees to the original bill, then compute the interest based on the new principal.
Compute the interest due on the original principal, add that and any late fees to the original bill, then compute the interest based on the new principal.

Compute the interest based on the original bill.
Compute the interest based on the original bill.

Compute the interest based on the original bill plus the previous interest.
Compute the interest based on the original bill plus the previous interest.

Compute the interest based on the original bill and late fees.

Answer 1

Compute the interest based on the original bill plus the previous interest.

Reason: interest accrues on the outstanding balance, which includes any unpaid interest (and usually fees), so the next interest is calculated on that total.