Financial Algebra © Cengage/South-Western Slide CREDIT CARD STATEMENT To identify and use the various entries in a credit card statement. OBJECTIVES

Financial Algebra © Cengage Learning/South-Western Slide 2 billing cycle credit card statement account number credit line available credit billing date payment due date transactions debit/credit previous balance payments/credits new purchases late charge finance charge new balance minimum payment average daily balance number of days in billing cycle APR monthly periodic rate Key Terms

Financial Algebra © Cengage Learning/South-Western Slide 3 The summary portion of Jane Sharp ’ s credit card statement shown is above. a. Explain how the new purchases amount was determined. b. Explain how the new balance amount was determined. Example 1

Financial Algebra © Cengage Learning/South-Western Slide 4 The summary portion of Jane Sharp ’ s credit card statement shown is above. a. Explain how the new purchases amount was determined. b. Explain how the new balance amount was determined. Example 1

Financial Algebra © Cengage Learning/South-Western Slide 5 Suppose you create the following spreadsheet that models the statement summary and input the values in row 2. Write the spreadsheet formula to compute the new balance in cell F2. CHECK YOUR UNDERSTANDING

Financial Algebra © Cengage Learning/South-Western Slide 6 Pascual has a credit line of $15,000 on his credit card. His summary looks as follows. How much available credit does Pascual have? Example 2

Financial Algebra © Cengage Learning/South-Western Slide 7 Rhonda had a previous balance of $ and made an on-time credit card payment of $ She has a credit line of x dollars and made purchases totaling y dollars. Write an algebraic expression that represents her current available credit. CHECK YOUR UNDERSTANDING

Financial Algebra © Cengage Learning/South-Western Slide 8 Myrna is examining the summary section of her credit card statement. Myrna has checked all the entries on her bill and agrees with everything except the new balance. Determine where the error was made. Example 3