1. Statements & Finance Charge
Lesson 13

2. Account Statements
13a

3. With a credit card or charge account a monthly account statement is received that lists all the items purchased during a one-month period.
The credit card company will add on a finance charge which is a charge for delaying payment.

4. Formula to find amount due on payment…
New
Balance
Previous Balance
Finance Charge
New Purchases = + + - -
Payments
Credits

5. Use the table to find the new balance on the charge account.
Bill Closing Date
Previous Balance
Finance Charge
Total Purchases This Month
Credits
Payment
New Balance
09/30
$332.64
$5.64
$173.03
$31.94
$50.00
10/31
$6.58
$148.55
$57.95
$150.00
11/30
$3.54
$123.45
$30.50
$100.00
$429.37
$429.37
$377.59
$377.59
$373.04

6. Finance Charge: Unpaid Balance Method

7. Some use the unpaid-balance method to compute finance charges
Some use the unpaid-balance method to compute finance charges. This means the finance charge is based on the balance that has not yet been paid.

8. Formula to find amount due on payment…
Unpaid Balance
Previous Balance = - -
Payments
Credits
Finance Charge
Unpaid Balance
Periodic Rate = x
New Balance
Unpaid Balance
Finance Charge
New Purchases = + +

9. Suppose the monthly finance charge is 1. 5% of the unpaid balance
Suppose the monthly finance charge is 1.5% of the unpaid balance. Use the table and the unpaid-balance method to find the new balance on the charge account.
Previous Balance
Payments Credits
Unpaid Balance
Finance Charge
New Purchases
New Balance
$132.40
$40.00
$79.55
$50.00
$95.99
$75.00
$105.05
$92.40
$1.39
$173.34
$173.34
$123.34
$1.85
$221.18
$221.18
$146.18
$2.19
$253.42

10. Lesson 13: Statements & Finance Charge
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