To determine the finance charges for month 2, we need to follow a systematic approach.
1. Identify the annual percentage rate (APR) and convert it to a monthly rate:
- The APR is given as 13%.
- To convert the APR to a monthly rate, divide by 12 (since there are 12 months in a year):
[tex]\[
\text{Monthly Interest Rate} = \frac{13\%}{12} = \frac{13}{100 \times 12} = \frac{13}{1200} = 0.01083333
\][/tex]
2. Determine the previous balance for month 2:
- From the table, the previous balance at the end of month 1, which becomes the previous balance for month 2, is [tex]$41.00.
3. Calculate the finance charges for month 2:
- Finance charges are calculated on the previous month's balance using the monthly interest rate.
- The formula to calculate finance charges is:
\[
\text{Finance Charges} = \text{Previous Balance} \times \text{Monthly Interest Rate}
\]
- Plugging in the values:
\[
\text{Finance Charges} = 41.00 \times 0.01083333
\]
- Simplifying this, we obtain:
\[
\text{Finance Charges} = 0.4441666666666667
\]
Therefore, the finance charges for month 2 are approximately $[/tex]\[tex]$ 0.44$[/tex].
The correct answer is:
B. [tex]$\$[/tex] 0.44$
