Chapter 1.E, Problem 47E

Credit Card Agreement. The following rules are among the provisions of a credit card agreement.

For the regular plan, the minimum payment due is the greater of $10.00 or 5% of the new balance shown on your Statement (rounded to the nearest $1.00) plus unpaid late fees and returned check fees, and any amounts shown as past due on your statement.

If make a purchase a regular plan, no finance charges will be imposed in any billing period in which (i)

there is no previous balance or (ii) payments received and credits issued by the payment due date, which is 25 days after the statement closing date shown on your last statement, equal or exceed the previous balance. If the new balance is not satisfied in full by the payment due date shown on your last statement there will be a charge on each purchase from the date of purchase.

a. If the new balance in your account is $8 and have $35 in unpaid late fees, what is your minimum payment due?

b. Suppose you have a previous balance $150 and you pay $200 one month after the statement closing date. Will you be assessed a finance charge?

c. In part (b) if you make a purchase on the same day that you make the $200 payment will a finance charge be assessed on that purchase?