Answered

Leroy's credit card has an APR of 21%, calculated on the previous monthly balance, and a minimum payment of 2%, starting the month after the first purchase. His credit card record for the last 7 months is shown in the table below.

| Month | Previous Balance | New Charges | Payment Received | Finance Charges | Principal Paid | New Balance |
|-------|------------------|-------------|------------------|-----------------|----------------|-------------|
| 1 | [tex]$0.00 | $[/tex]2600.00 | [tex]$0.00 | $[/tex]0.00 | [tex]$0.00 | $[/tex]2600.00 |
| 2 | [tex]$2600.00 | $[/tex]0.00 | [tex]$52.00 | $[/tex]45.50 | [tex]$6.50 | $[/tex]2593.50 |
| 3 | [tex]$2593.50 | $[/tex]0.00 | [tex]$51.87 | $[/tex]45.39 | [tex]$6.48 | $[/tex]2587.02 |
| 4 | [tex]$2587.02 | $[/tex]0.00 | [tex]$51.74 | $[/tex]45.27 | [tex]$6.47 | $[/tex]2580.55 |
| 5 | [tex]$2580.55 | $[/tex]0.00 | [tex]$51.61 | $[/tex]45.16 | [tex]$6.45 | $[/tex]2574.10 |
| 6 | [tex]$2574.10 | $[/tex]0.00 | [tex]$51.48 | $[/tex]45.05 | [tex]$6.44 | $[/tex]2567.66 |
| 7 | [tex]$2567.66 | $[/tex]0.00 | [tex]$51.35 | $[/tex]44.93 | [tex]$6.42 | $[/tex]2561.24 |

What is the total amount that Leroy has paid in interest over the 7 months?

A. [tex]$44.93
B. $[/tex]38.76
C. [tex]$310.06
D. $[/tex]271.30



Answer :

GinnyAnswer
To solve for the total amount that Leroy has paid in interest over the 7 months, we need to focus on the finance charges column in the provided table. The finance charges represent the interest Leroy has paid each month. We will total these charges to determine the total interest paid over the period.

Here is Leroy's credit card record with the finance charges highlighted for each month:
[tex]\[ \begin{array}{ccccccc} \hline \text{End of month} & \text{Previous balance} & \text{New charges} & \text{Payment received} & \text{Finance charges} & \text{Principal paid} & \text{New balance} \\ \hline 1 & \$0.00 & \$2600.00 & \$0.00 & \$0.00 & \$0.00 & \$2600.00 \\ 2 & \$2600.00 & \$0.00 & \$52.00 & \$45.50 & \$6.50 & \$2593.50 \\ 3 & \$2593.50 & \$0.00 & \$51.87 & \$45.39 & \$6.48 & \$2587.02 \\ 4 & \$2587.02 & \$0.00 & \$51.74 & \$45.27 & \$6.47 & \$2580.55 \\ 5 & \$2580.55 & \$0.00 & \$51.61 & \$45.16 & \$6.45 & \$2574.10 \\ 6 & \$2574.10 & \$0.00 & \$51.48 & \$45.05 & \$6.44 & \$2567.66 \\ 7 & \$2567.66 & \$0.00 & \$51.35 & \$44.93 & \$6.42 & \$2561.24 \\ \hline \end{array} \][/tex]

The finance charges for each of the months are as follows:
1. Month 1: \[tex]$0.00 2. Month 2: \$[/tex]45.50
3. Month 3: \[tex]$45.39 4. Month 4: \$[/tex]45.27
5. Month 5: \[tex]$45.16 6. Month 6: \$[/tex]45.05
7. Month 7: \[tex]$44.93 To obtain the total interest paid over the 7 months, we sum these finance charges: \[ 0.00 + 45.50 + 45.39 + 45.27 + 45.16 + 45.05 + 44.93 = 271.30 \] Therefore, the total amount that Leroy has paid in interest over the 7 months is: \[ \boxed{271.30} \text{ dollars} \] The correct answer is D. $[/tex]271.30$.