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Account Statements

SECTION. 7-1. pp. 258-260. Account Statements. Calculate: new balance on a charge account. Section Objective. Key Words to Know. credit card (p. 258) A card that allows the cardholder to purchase goods and services on demand by presenting it. charge account (p. 258)

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Account Statements

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  1. SECTION 7-1 pp. 258-260 Account Statements

  2. Calculate: • new balance on a charge account Section Objective

  3. Key Words to Know credit card (p. 258) A card that allows the cardholder to purchase goods and services on demand by presenting it. charge account (p. 258) An existing line of credit, often at a particular business.

  4. Key Words to Know account statement (p.258) A bank statement that shows all deposits, withdrawals, and interest credited to an account. finance charge (p. 258) Interest that is charged to a credit account if the account holder does not pay on time.

  5. Formula New Balance = Previous + Finance + New – (Payments + Credits) Balance Charge Purchases

  6. A Financial Gem? p. 258 What are the disadvantages of using credit cards?

  7. Example 1 See Figure 7.1 on page 259 of your textbook. Martha Palmer received this charge account statement on October 2. What is her new balance?

  8. Example 1 Answer Step: Find the new balance. Previous + Finance + New – (Payments + Credits) Balance Charge Purchases $332.64 + $5.64 + $173.03 – ($50.00 + $31.94) = $511.31 – $81.94 = $429.37

  9. Example 2 Dante Green’s charge account statement showed a previous balance of $157.80, a finance charge of $2.76, new purchases of $86.50 and $48.50, a payment of $40.00, and a credit of $37.85. What is the new balance?

  10. Example 2 Answer Step: Find the new balance. Previous + Finance + New – (Payments + Credits) Balance Charge Purchases $157.80 + $2.76 + ($86.50 + $48.50) – ($40.00 + $37.85) $295.56 – $77.85 = $217.71

  11. Practice 1 • Malcolm Turner’s charge account statement showed: • a previous balance of $270.49 • a finance charge of $4.05 • new purchases of $44.62 • a payment of $225.00 • What is the new balance?

  12. Practice 1 Answer $94.16

  13. END OF SECTION 7-1 Account Statements

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