Open/Closed End Credit Card
by Pam Lockett
(Napoleonville, Louisiana, USA)
It’s time to go shopping! You grab your Best Purchase credit card, which has an annual interest rate of 18%. Assume that you have a previous charged balance of $285.76 (before interest has been applied) on the card. On your shopping trip, you purchased three items: a Blu-ray player, two 4-GB flash drives, and a 19-inch flat-screen television. You purchase all the items on your credit card for a total of $352.18. When the bill comes at the end of the month you decide to pay all of the charges. Answer the following questions, showing any needed calculations. (Round all your answers to nearest hundredth or cent.)
What is the monthly interest rate?
What are the interest charges on the card? (Calculate only on last month’s unpaid balance)
What is the total balance on your card?