A credit card has an average daily balance of $2,861.56 and the monthly periodic rate is 1.295%. What is the finance charge for the month? The finance charge for the month is S (Round to the nearest cent as needed.)

A credit card has an average daily balance of $2,861.56 and the monthly periodic rate is 1.295%. What is the finance charge for the month? The finance charge for the month is S (Round to the nearest cent as needed.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.

Question

A credit card has an average daily balance of $2,861.56 and the monthly periodic rate is 1.295%. What is the finance charge for the month?
The finance charge for the month is S (Round to the nearest cent as needed.)

Expert Solution

Step 1

Average Daily Balance of Credit Card = $2,861.56

Monthly Interest Rate = 1.295%

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