Chip has a $50.00 balance on his credit card. Since he didn't pay it off, he will be charged a 20% interest fee. He puts $20.00 on his credit card the following month and doesn't make any payments to his debt. He is hit with another 20% interest fee. What's the current balance on his credit card?
Stream of thoughts:
96
He has a balance of $50.

00 and is charged 20% interest so that's 50 *.

20 = $10.

00.

He had a balance of $50.

00 and now has a $10.

00 interest fee making his balance 50 + 10 = $60.

00.

His balance is $60.

00 and he puts another $20.

00 on his card for a total of 60 + 20 = $80.

00.

He didn't make a payment that month and is hit with another 20% interest fee so that's 80 *.

20 = $16.

00 in interest.

His new balance is 80 + 16 = $96.

00.

.

The answer: 96