Use of Financial Calculator TI BA II Plus required. You have $26 in creditors insurance, which is debited to your card monthly to cover payments if you are disabled. You charged $800 to your card last month and you paid $400 on your account. What will be the credit charge at 1.75 percent per month using the adjusted balance method?
A)$2.98
B)$14.00
C)$7.00
D)$7.46

Question

Quizplus · Accepted Answer

The adjusted balance method formula is:
Adjusted balance = Previous balance - Payments made + Credits made

Previous balance = $800
Payments made = $400
Credits made = $26

Adjusted balance = $800 - $400 + $26 = $426

Credit charge at 1.75% per month = $426 x 1.75% = $7.455

Rounded to the nearest cent, the credit charge is $7.46. Therefore, the correct answer is D.

Use of Financial Calculator TI BA II Plus Required