​a) Find the average daily balance for the billing period. ​b) Find the finance charge to be paid on February 17.Assume an interest rate of​ 1.2% per month. ​c) Find the balance due on February17.

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A: Interest charges indicate the additional rate charged by the lender over the principle amount.

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Q: Use the average daily balance method to compute the finance charge

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Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.