Johnny's credit card company charges him an interest rate of 29.99% per annum. On his statement dated October 31st, he owed a total of $2,865.45. He paid only the minimum payment, which is either 5% or $25.00, whichever is greater. How much will he owe on his next statement date of November 30th, if he does not use his credit card again before that date?
Balance of his account statement on Oct.31 =$2,865.45
$2,865.45 x 29.99% =$859.35 - interest charge on his balance for 1 year.
$859.35 / 12 =$71.61 - interest charge on his balance for 1 month.
$2,865.45 + $71.61 =$2,937.06 - Balance of account statement on Nov. 30, principal + interest.
$2,937.06 x 5% =$146.85 - Minimum monthly pmt. that he must make.
$2,937.06 - $146.85 =$2,790.21 - Balance of his acct. statement on Nov.30th after the minimum monthly payment.