Thompson Lubricating Store Has the Following Credit Terms: "The Finance

question 18

Short Answer

Thompson Lubricating 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 $1,300 and 1.3% per month on amounts in excess of $1,300. These are annual percentage rates of 15.7% and 13.02%, respectively. There is no finance charge if the full amount of the new balance is paid within 30 days after the cycle closing date."Compute the finance charge and the new balance for the two customers shown below. Assume that both payments were made within the 30-day period.
​

---

Definitions:

Product X

A placeholder term for an unspecified or hypothetical product used in discussions or analyses.

Income Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in consumer income.

Consumer Income

The total earnings of consumers, which determines their purchasing power and ability to consume goods and services.

Jewelry

Decorative items worn for personal adornment, such as rings, necklaces, earrings, and bracelets, which are often made from valuable materials.