Biology Forums - Study Force

Turner Landscape Supply, Inc., 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 1.4% per month up to $1,250 and 1.2% per month on amounts in excess of $1,250. These are annual percentage rates of 16.8% and 14.4%, 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 payment and purchase history of one customer, Hertzer Landscaping, for two consecutive months. Assume that both payments were made within the 30 day period.

	Cycle	Previous	Finance		Payment			New
	Closing	Balance	Charge	Payments	Date	Purchases	Credits	Balance
a.	6/25	$2,747.51	_______	$2,350	7/20	$842.17	$176.68	_______
b.	7/25	_______	_______	$   750	8/22	$263.04	$  19.88	_______

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