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Credit terms and finance charge

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A department store has the following credit terms. The finance charge if any is based on the previous balance before payments or credits are deducted. the rates are 1.5%per month up to $1,000and 1.25%per month in excess of 1,000.There is no finance charge if the full amount of the new balance is paid within 30 days after the cycle closing date

I need to find the new balance for the account but i first need to find the finance charge.
previous balance $991.39 the payment is $675.00 the credit is $84.21 and the finance charge is what I need to obtain.

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Solution Summary

This shows how to find the finance charge for a given credit situation.

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The previous balance is $991.39. The finance charge is based on the previous ...

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