Answered

Carlton's credit card has an APR of 17%, 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.

[tex]\[
\begin{tabular}{ccccccc}
\hline
End of month & Previous balance & New charges & Payment received & Finance charges & Principal paid & New balance \\
\hline
1 & \$0.00 & \$4400.00 & \$0.00 & \$0.00 & \$0.00 & \$4400.00 \\
2 & \$4400.00 & \$0.00 & \$88.00 & \$62.33 & \$25.67 & \$4374.33 \\
3 & \$4374.33 & \$0.00 & \$87.49 & \$61.97 & \$25.52 & \$4348.82 \\
4 & \$4348.82 & \$0.00 & \$86.98 & \$61.61 & \$25.37 & \$4323.45 \\
5 & \$4323.45 & \$0.00 & \$86.47 & \$61.25 & \$25.22 & \$4298.23 \\
6 & \$4298.23 & \$0.00 & \$85.96 & \$60.89 & \$25.07 & \$4273.16 \\
7 & \$4273.16 & \$0.00 & \$85.46 & \$60.54 & \$24.93 & \$4248.23 \\
\hline
\end{tabular}
\][/tex]

How much of the \[tex]$4400 charge that Carlton made during the first month has been paid off?

A. \$[/tex]520.36
B. \[tex]$24.93
C. \$[/tex]151.77
D. \$368.59



Answer :

GinnyAnswer
To determine how much of the \[tex]$4400 charge Carlton made during the first month has been paid off, we need to sum the principal paid amounts from months 2 through 7. Here is a step-by-step breakdown: 1. Month 2: - Principal paid: \$[/tex]25.67

2. Month 3:
- Principal paid: \[tex]$25.52 3. Month 4: - Principal paid: \$[/tex]25.37

4. Month 5:
- Principal paid: \[tex]$25.22 5. Month 6: - Principal paid: \$[/tex]25.07

6. Month 7:
- Principal paid: \[tex]$24.93 Next, we sum these amounts to find the total principal paid by Carlton from month 2 to month 7. \[ \text{Total Principal Paid} = 25.67 + 25.52 + 25.37 + 25.22 + 25.07 + 24.93 = 151.78 \] Thus, Carlton has paid off \$[/tex]151.78 of the \[tex]$4400 charge made during the first month. The correct option is: C. \$[/tex]151.78