Enter your previous unpaid balance, interest rate, additional purchases, and previous payment made towards the balance to determine the current unpaid balance.

## Unpaid Balance Formula

The following formula is used to calculate the current unpaid balance given a previous balance, interest rate, additional purchases, and payments made towards the balance.

UB = PB*I + PB – DP + AP

• Where UB is the unpaid balance (\$)
• PB is the prevoius balance (\$)
• I is the interest rate (%)
• DP is any down payments made on the balance over the last month (\$)
• AP are additional purchases in the last month (\$)

## What are unpaid balances?

Unpaid balances are defined as the total amount due on a loan or credit card that has gone unpaid from the previous payment period.

In other words, the balance you will owe the next time a payment is due.

## Example Problem

How to calculate an unpaid balance?

First, determine the previous balance on the credit card. For this example, the person had a previous balance of \$300.00.

Next, determine the interest rate on the card. This should be the periodic interest rate, which in this case, is found to be 15%.

Next, determine any amount of payments made to the unpaid balance. Over the last month, the person in this example paid \$50 towards the balance.

Next, determine any additional purchases made with the card. For this example, there was 25\$ worth of purchases made on the card.

Finally, calculate the next/current unpaid balance using the formula above:

UB = PB*I + PB – DP + AP

UB = 300*.15 + 300 – 50 + 25

UB = \$320.00.