An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?
Answer (1)
Calculate the Monthly Periodic Rate: 12 12% = 1% .
Calculate the Finance Charge: $25.00 × 0.01 = $0.25 .
Calculate the New Balance: $25.00 + $0.25 + $177.70 − $65.00 = $137.95 .
The missing values are 1%, $0.25 , and $137.95 , respectively. $137.95
Explanation
Understanding the Problem We are given a revolving credit account problem where we need to calculate the missing information: Monthly Periodic Rate, Finance Charge, and New Balance. We will use the given Previous Balance, Annual Percentage Rate (APR), Purchases and Cash Advances, and Payments and Credits to find the missing values.
Calculating Monthly Periodic Rate First, we need to calculate the Monthly Periodic Rate. The Annual Percentage Rate (APR) is 12%, so we divide this by 12 to find the monthly rate: M o n t h l y P er i o d i c R a t e = 12 A PR = 12 12% = 1% So, the Monthly Periodic Rate is 1%.
Calculating Finance Charge Next, we calculate the Finance Charge. This is the interest charged on the previous month's balance. We multiply the Previous Balance by the Monthly Periodic Rate: F inan ce C ha r g e = P re v i o u s B a l an ce × M o n t h l y P er i o d i c R a t e = $25.00 × 0.01 = $0.25 So, the Finance Charge is $0.25.
Calculating New Balance Finally, we calculate the New Balance. We start with the Previous Balance, add the Finance Charge and Purchases and Cash Advances, and then subtract the Payments and Credits: N e wB a l an ce = P re v i o u s B a l an ce + F inan ce C ha r g e + P u rc ha ses A n d C a s h A d v an ces − P a y m e n t s A n d C re d i t s N e wB a l an ce = $25.00 + $0.25 + $177.70 − $65.00 = $137.95 So, the New Balance is $137.95.
Final Answer Therefore, the missing values are:
Monthly Periodic Rate: 1%
Finance Charge: $0.25
New Balance: $137.95
Examples
Understanding revolving credit accounts is crucial for managing personal finances. For example, if you have a credit card and want to keep your balance low, knowing how interest is calculated helps you make informed decisions about purchases and payments. By calculating the monthly periodic rate and finance charges, you can estimate the total cost of borrowing and plan your payments accordingly to avoid accumulating debt. This knowledge is also useful when comparing different credit card offers to choose the one with the most favorable terms.
