You Have a Balance of $3800 on Your Credit Card

question 47

Multiple Choice

You have a balance of $3800 on your credit card and you make no further charges. Assuming that your APR is 18.9% and that each month you make only the minimum payment of 5% of your balance, determine when the balance first drops below $100.

• A)After 100th payment
• B)After 102nd payment
• C)After 105th payment
• D)After 107th payment

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Definitions:

Financial Statements

Official accounts detailing the economic operations and condition of an enterprise, person, or any other unit.

Unearned Legal Fees

Money received by an entity for legal services yet to be performed, recognized as a liability until the services are rendered.

Adjusting Entry

A journal entry made at the end of an accounting period to update the ledger accounts for accruals, deferrals, and other adjustments necessary to ensure accurate financial reports.

Revenue Account

A revenue account tracks the income generated from a company's primary operations, such as sales of goods and services, during an accounting period.