Average Daily Balance. Alexis Monroe, a biologist from Dyersburg, Tennessee, is curious about the accuracy of the interest charges shown on her most recent credit card billing statement, which appears as Figure 7-1 on page 204. Use the average daily balances provided to recalculate the interest charges, and compare the result with the amount shown on the statement.
Average Daily Balance. Alexis Monroe, a biologist from Dyersburg, Tennessee, is curious about the accuracy of the interest charges shown on her most recent credit card billing statement, which appears as Figure 7-1 on page 204. Use the average daily balances provided to recalculate the interest charges, and compare the result with the amount shown on the statement.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Average Daily Balance. Alexis Monroe, a biologist from Dyersburg, Tennessee, is curious about the accuracy of the interest charges shown on her most recent credit card billing statement, which appears as Figure 7-1 on page 204. Use the average daily balances provided to recalculate the interest charges, and compare the result with the amount shown on the statement.
Transcribed Image Text:Figure 7-1
Statement for a Bank Credit Card Account
XXX Bank Credit Card Account Statement
Account Number XXXX XXXX XXXX XXXX
February 21, 2018 to March 22, 2018
Statement Date 03/22/18
Summary of Account Activity
Payment Information
$1,798.14
$53.00
$535.07
-$450.00
-$0.00
+$529.57
+$785.00
+$318.00
$0.00
+$69.45
+$11.05
New Balance
Minimum Payment Due
Payment Due Date
Previous Balance
Payments
Other Credit
Purchases
4/20/18
Late Payment Warning: If we do not receive your minimum Payment
by the date listed above, you may have to pay a $25 late fee and your
APRS may be increased up to the Penalty APR of 28.99%
Balance Transfers
Cash Advances
Past Due Amount
Fees Charged
Interest Charged
Minimum Payment Warning: If you make only the minimum payment
each period, you will pay more in interest and it will take you longer to
pay off your balance. For example:
New Balance
$1,798.14
If you make no
additional charges
using this card and
each month you pay...
$2,000.00
$201.86
3/22/2018
You will pay off the
balance shown on
And you will
end up paying
as estimated
Credit limit
Available credit
Statement closing date
Days in billing cycle
this statement in
about...
total of...
30
Only the minimum
payment
10 years
$3,284
Questions?
Call Customer Service
Lost or Stolen Credit Card
1-XXX-XXX-ХXXX
$2,232
(Savings = $1,052)
1-XXX-XXX-XXXX
$62
3 years
If you would like information about credit counseling services,
call 1-800-XXX-XXXX
Please send billing inquiries and correspondence to:
PO Box XXXX, Anytown, Anystate XXXXX
Transactions
Description of Transaction or Credit
Store #1
Amount
$146.19
Reference Number
Trans Date
Post Date
5884186PS0388W6YM
854338203FS800025
564891561545KOSHD
2/22
2/23
Pymt Thank You
Store #2
2/25
2/25
$247.36
$318.00
$785.00
$ 34.32
$ 29.45
$ 72.25
2/25
2/26
1542202074TWWZV48
2/26
2/26
Cash Advance
4545754784KOHUIOS
Balance Transfer
Store #3
2/27
3/1
2564561023184102315
2/28
3/1
045148714518979874
0547810544898718AF
Store #4
Store #5
3/4
3/5
3/15
3/17
Fees
2/23
Late Fee
$25.00
$23.55
$20.90
$69.45
9525156489SFD4545Q
2/23
84151564SADS874H
2/27
2/27
Balance Transfer Fee
256489156189451516L
2/28
2/28
Cash Advance Fee
TOTAL FEES FOR THIS PERIOD
Interest Charged
Interest Charge on Purchases
Interest Charge on Cash Advances
TOTAL INTEREST FOR THIS PERIOD.
$ 6.40
$ 4.65
$11.05
Transcribed Image Text:Interest Charged
Interest Charge on Purchases
Interest Charge on Cash Advances
TOTAL INTEREST FOR THIS PERIOD
$ 6.40
$ 4.65
$11.05
2018 Totals Year-to-Date
Total fees charged in 2018
Total interest charged in 2018
$90.14
$18.27
Interest Charge Calculation
Your Annual Percentage rate (APR) is the stated interest rate on your account.
Balances Subject to
Type of Balance
Annual Percentage Rate (APR)
Interest Rate
Interest Charge
$512.14
$253.50
$637.50
$ 0.00
$6.40
$4.65
$0.00
$0.00
Purchases
14.99% (V)
21.99% (V)
0.00%
Cash Advances
Balance Transfers
Penalty APR
28.99%
(V) = Variable Rate
erved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Expert Solution
Step 1
To calculate monthly APR, Total APR is to be divided by 12.
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