Question

You have a credit card with a balance of $1,187.92 and the interest is 12.25% APR. A late fee of $30.00 is charged for payments after the due date. You missed your payment due date, but plan to make a payment of $125.00 on the next due date. What will be the new principal after that payment?
(1 point)
Responses

$1,242.39
$1,242.39

$1,105.05
$1,105.05

$1,117.61
$1,117.61

$1,062.92

Answer 1

Monthly rate = 12.25%/12 = 0.0102083333.
Interest = 1187.92 × 0.0102083333 = 12.13 (rounded).
New balance before payment = 1187.92 + 30.00 + 12.13 = 1230.05.
After $125 payment: 1230.05 − 125.00 = $1,105.05.

Answer: $1,105.05