Biology Forums - Study Force

Edison Restaurant Supply offers the following credit terms: "The finance charge is based upon the net balance if payment is made within 25 days of the billing date. If payment is made after 25 days, then the finance charge is based on the previous balance. Net balance equals previous balance less payments, returns and credits. In either case, the monthly interest rate is 1.3% on the first $500 of the net balance and 1.1% on any amount over $500."

Compute the net balance, the finance charge, and the new balance for customer Kimberley's Kitchen for two consecutive months. Assume that both payments were made within the 25-day period.

	Previous		Returns/	Net	Finance		New
	Balance	Payments	Credits	Balance	Charge	Purchases	Balance
a.	$2,874.63	$   750.00	$261.22	_______	_______	$409.74	_______
b.	_______	$2,000.00	$103.74	_______	_______	$612.77	_______

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