3.6 Credit Card Statement - C

Multiple Choice

Bellwork:

Find 15% of the difference between $235.99 and $123.45.

• $12.45
• $18.75
• $20.50
• $16.88

Financial Algebra Second Edition

Slide 2

3-6: Credit Card Statement

Learning Goals

The students will be able to:

• Read a credit card monthly statement

• Identify and use the various entries in a credit card statement.

Financial Algebra Second Edition

Slide 3

What Information Does a Credit Card Statement Give You?

Financial Algebra Second Edition

Slide 4

Example 1

The summary portion of Jane Sharp’s credit card statement looks as follows:

a. Explain how the new purchases amount was determined.

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Financial Algebra Second Edition

Slide 4

Example 1

The summary portion of Jane Sharp’s credit card statement looks as follows:

a. Explain how the new purchases amount was determined.

The new purchases amount is the sum of the purchases, which also appear as debits. This sum must equal the amount $284.45 listed in the New Purchases section of the statement summary.

New purchase = 75 + 31.85 + 139.10 + 38.50 = $284.45

Financial Algebra Second Edition

Slide 5

Example 1 - continue

b. Explain how the new balance amount was determined.

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Financial Algebra Second Edition

Slide 5

Example 1 - continue

b. Explain how the new balance amount was determined.

The new balance amount is determined by using the
formula given below.

Drag and Drop

How many purchases were made during the billing cycle? ​

Placeholder

What is the sum of all purchases made during the billing cycle?​

Placeholder

How many days are in the billing cycle?​

Placeholder

Drag these tiles and drop them in the correct blank above

4

$1,227.24

30

$1,000

31

6

Financial Algebra Second Edition

Slide 7

Example 2
Pascual has a credit limit of $15,000 on his credit card.
His summary looks as follows.
How much available credit does Pascual have?

Financial Algebra Second Edition

Slide 7

Example 2
Pascual has a credit limit of $15,000 on his credit card.
His summary looks as follows.
How much available credit does Pascual have?

Solution
Pascual needs to determine his new balance and then subtract that from his credit line in order to find his available credit.

4,598.12 – 4,000.00 + 1,368.55 + 20.00 + 5.78 = 1,992.45

He has a new balance of $1,992.45. Subtracting this from his credit line of $15,000 leaves him with an available credit of $13,007.55.

Multiple Choice

Rebecca has a credit limit of $6,500 on her credit card. She had a previous balance of $398.54 and made a $250 payment. The total of her purchases is $1,257.89. What is Rebecca’s available credit?

• $5,093.57

• $6,789.12
• $5,000.76
• $8,000.23

Financial Algebra Second Edition

Example 3

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.

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Financial Algebra Second Edition

Example 3

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.

Solution:
Add the amounts that show Myrna’s debits.
Subtract the $100 payment/credit, and Myrna’s new balance will be $2,476.15. It appears that Myrna was not credited for her payment.

Multiple Choice

Determine the error that was made using the following summary statement.

• The new balance should be $597.78.

• The new balance should be $593.00.

• The new balance should be $594.78.

• The new balance should be $297.78.

Financial Algebra Second Edition

FINE PRINT: Credit Card Statement

– To turn in

In this activity, you will explore a credit card statement in more detail to understand its various components. Then, you will answer questions using the sample credit card statement. Go to Quizzes section on Canvas to find the activity.