A credit card is advertised with an annual percentage rate (APR) of 24%. The advert also states that interest on the credit card is calculated quarterly. a) Using the information above, explain the difference between the APR and the effective annual rate (EAR).

Q: Suppose your MasterCard calculates interest using the average daily balance method, and the monthly…

A: "Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: K Use the average daily balance method to compute the finance charge on the credit card account for…

A: The objective of this question is to calculate the finance charge for the month of August using the…

Q: Journalize the following entries on the books of the borrower and creditor. (Assume a 360-day year…

A: The journal entries are prepared to keep the record of day to day transactions of the business.

Q: Calculate the average daily balance (in $) for October for a revolving credit account with a…

A: The average daily balance is a method used by credit card companies to calculate the amount of…

Q: Calculate the average daily balance (in $) for October for a revolving credit account with a…

A: Variables in the question:Previous month's balance =$110DateActivityAmountOctober 3Cash…

Q: On June 6, Nova Inc. accepts a $21,500 note from a customer in payment of an overdue account. The…

A: The journal entries are prepared to record the transactions on regular basis. The adjustment entries…

Q: The balance on a credit card, that charges a 10.5% APR interest rate, over a 1 month period is given…

A: Interest rate = 10.5% Initial balance = $150  Number of days = 1-3 is 3 days Number of days = 4-20…

Q: On August 10, a credit card account had a balance of $365. A purchase of $62 was made on August 15,…

A: In credit cards, we can say that finance charges include interest and transaction fees charged on…

Q: iodic Rate (as a %) Finance Charge (in $) Purchases and Cash Advances Payments and

A: Calculate APR as follows: APR = Monthly rate ×12 =114%×12=1.25%×12=15% Thus , APR id 15%

Q: Calculate the finance charge for a credit card that has been given an average daily balance and…

A: One technique a credit card issuer uses to determine the finance charges or interest on your card is…

Q: American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on…

A: The annual percentage rate(APR) is the interest rate (nominal rate) determined by the credit card…

Q: Calculate the missing information on the revolving credit account. Interest is calculated on the…

A: Formula: Annual percentage rate = Monthly periodic rate x 12 months Multiplying monthly periodic…

Q: Prefix Supply Company received a 120-day, 8% note for $450,000, dated April 9 from a customer on…

A: Note is a form of debt issued or taken by the company. Interest has to be paid or received on the…

Q: A credit card has an average daily balance of ​$2,833.84 and the monthly periodic rate is 1.337​%.…

A: Finance Charges for the month  = Average Daily balance X Periodic Rate

Q: Note receivable Prefix Supply Company received a 120-day, 7% note for $84,000, dated April 12 from a…

A: The journal entries are prepared to record the transactions on regular basis. The note receivable…

Q: A credit card has an average daily balance of $2,861.56 and the monthly periodic rate is 1.295%.…

A: Average Daily Balance of Credit Card = $2,861.56 Monthly Interest Rate = 1.295%

Q: Use the average daily method to find the finance charge on the credit card account for September…

A: Average daily balance is a method in which balance for each day is calculated. Sum of each day…

Q: Journalize the transactions. Assume 360 days for interest calculations and record two entries for…

A: In accounting, journalizing transactions involves recording financial events in a systematic way to…

Q: Quick Tire and Lube received a 120-day, 9% note for $60,000, dated June 12, from a customer on…

A: Maturity value of the note=Face value of note+Interest revenue

Q: If a credit card you are interested in has an APR of 16%, what would the Daily Periodic Rate (DPR)…

A: APR = APR stands for Annual Percentage rate. It is a interest rate you pay for borrowing money on…

Q: For the credit card account, assume one month between billing dates (with the appropriate number of…

A: Average daily balance is the

Q: What is the finance charge, on the average daily balance, for this card over this 1 month period?

A: Finance Charge is the interest charged by credit card companies over an outstanding amount.  Average…

Q: A credit card bill for $559 was due on September 14. Purchases of $283 were made on September 19,…

A: To find the finance charge, we need to first calculate the average daily balance for the billing…

Q: Calculate the missing information on the revolving credit account. Interest is calculated on the…

A: Calculate APR as follows: APR = Monthly rate×12=114%×12=1.25%×12=0.15=15%   Calculate finance charge…

Q: )Determine the due date of the note. b)Determine the maturity value of the note. Assume 360 days in…

A: Given information is: Lundquist Company received a 60-day, 9% note for $21,500, dated July 23, from…

Q: Use average daily balance method to compute finance charge on credit card account for August, 31…

A: Credit Card enables holder to use money beyond the credit balance in checking account up to…

Q: Suppose your VISA card calculates interest using the average daily balance method, and the monthly…

A: "Since you have posted a question with multiple sub-parts, we will provide the solution only to the…

Q: Journalize the following entries on the books of the borrower and creditor. (Assume a 360-day year…

A: Journal- It refers to the primary books of account under which entries/transactions are recorded in…

Q: Calculate the missing information on the revolving credit account. Interest is calculated on the…

A: The periodic rate is set by credit card and other fiance companies by dividing the APR by period of…

Q: balance method. The table below shows your activity for the month of July. Date July 1 July 9 July…

A: Credit cards provide short term credit and can be later with interest and credit cards are used now…

Credit card

A credit card is provided by financial institutions or banks, which permits a person to borrow money on a preapproved limit for purchases on a credit basis. The credit limit is decided by the institution and bank which issues a credit card depending on the person’s credit score and income. A cardholder can use the card for credit purchases, a balance transfer, cash advances.