Account Statements

# Account Statements

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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 = \$217.17

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?