Computing the unpaid balance for a credit card statement

Two-part: compute the interest charged on the prior month's unpaid balance, then assemble the new balance from beginning balance, payments, purchases, and that interest.

01 Worked Example Video

Every step of Computing the unpaid balance for a credit card statement explained on video. Pause anywhere; the embed scrolls independently of the page.

YOUTUBE

02 What This Looks Like on ALEKS

ALEKS randomizes the numbers each attempt, but the question shape stays the same. Here are three example versions you might see.

Priya's credit card statement

Priya’s February statement:

Transaction	Amount
Unpaid from January (Feb 1 balance)	$782.50
Payments in February	$90.00
Purchases in February	$245.30

The card charges 1.5% monthly interest on the unpaid balance from January. What’s Priya’s unpaid balance on her March 1 statement?

March 1 balance = $

Marcus's statement

Marcus’s July statement: beginning balance $1,124.40, payments $150.00, purchases $320.18, monthly rate 1.4%.

What’s Marcus’s unpaid balance on August 1?

Aug 1 balance = $

Lena's statement

Lena’s September statement: beginning balance $465.00, payments $45.00, purchases $112.50, monthly rate 1.6%.

What’s Lena’s unpaid balance on October 1?

Oct 1 balance = $

Heads up: Your ALEKS version will use different numbers. The numbers in the practice below are different too — that way you're exercising the move, not memorizing one answer.

03 The Rule

interest = beginning balance × monthly rate interest is on the prior balance only

new balance = beginning − payments + purchases + interest assemble in that order

Two formulas, applied in order. The interest is computed only on the prior month’s unpaid balance — new purchases this month don’t accrue interest yet. Then payments come off; purchases and interest go on. See it live: $650 balance at 20.4% APR paying $100/mo in the Credit Card Trap →

Common slips

(1) Charged interest on the new balance. Interest is on the prior balance only. (2) Used 1.5 instead of 0.015. 1.5% means 1.5/100 = 0.015. (3) Added payments or subtracted purchases. Payments decrease the balance; purchases increase it.

04 Practice — Step by Step

Practice this problem step by step

Beginning balance $650, payments $100, purchases $180, monthly rate 1.7%. What’s next month’s balance?

Step 1

Convert the monthly rate

Write 1.7% as a decimal.

monthly rate =

Step 2

Compute the interest

Interest is charged only on the prior balance ($650). Compute 650 × 0.017.

interest = $

Step 3

Apply the month's activity

Start with $650, subtract the $100 payment, add the $180 in purchases. Type the running total before adding interest.

running = $

Step 4

Add interest for the final balance

Add the $11.05 interest to the $730 running total for next month’s unpaid balance.

new balance = $

Q1 Q3

Computing the unpaid balance for a credit card statement

You walked the credit card statement end to end.