Last month, Kaitlin's average daily balance on her credit card was $1,363.16. The annual interest rate on that credit card is 17.5%. The minimum payment on that card is the interest charge (in the image) plus 3.5% of the ending balance or $25, which ever is larger. If there were 29 days in that month and the ending balance was $1,833.73, what would be the minimum payment that Kaitlin could make? Round your answer to the nearest penny.
Last month, Kaitlin's average daily balance on her credit card was $1,363.16. The annual interest rate on that credit card is 17.5%. The minimum payment on that card is the interest charge (in the image) plus 3.5% of the ending balance or $25, which ever is larger. If there were 29 days in that month and the ending balance was $1,833.73, what would be the minimum payment that Kaitlin could make? Round your answer to the nearest penny.
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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Last month, Kaitlin's average daily balance on her credit card was $1,363.16. The annual interest rate on that credit card is 17.5%. The minimum payment on that card is the interest charge (in the image) plus 3.5% of the ending balance or $25, which ever is larger. If there were 29 days in that month and the ending balance was $1,833.73, what would be the minimum payment that Kaitlin could make? Round your answer to the nearest penny.
![The provided image contains a mathematical expression, typically related to financial calculations such as interest or growth rates. Here is the transcription and detailed explanation suitable for an educational website:
---
### Mathematical Expression:
\[ I = \overline{B} \cdot \frac{r}{365} \cdot n \]
#### Explanation:
This formula can be interpreted as representing an interest calculation or a similar financial computation. Below is a breakdown of the components in the equation:
- \( I \): The total interest or the final amount after the calculation.
- \( \overline{B} \): The average balance or the principal amount. The bar over B typically signifies an average value over a period.
- \( \frac{r}{365} \): The daily interest rate. Here, \( r \) is the annual interest rate, and it is divided by 365 to convert it into a daily rate.
- \( n \): The number of days for which the interest is being calculated.
This formula is commonly used in scenarios where interest needs to be computed on a daily basis, such as for savings accounts, loans, or investments that are compounded or calculated daily.
---
By using this formula, students can better understand how interest accumulates over time on a daily basis and can apply it to various financial contexts to determine earnings or costs associated with borrowing or investing money.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d7c6d4e-e4d8-41d9-be97-5ff4f37381ad%2F9f8a56cc-95d4-4614-a4a7-43e523a3da61%2Ff7kf5z7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The provided image contains a mathematical expression, typically related to financial calculations such as interest or growth rates. Here is the transcription and detailed explanation suitable for an educational website:
---
### Mathematical Expression:
\[ I = \overline{B} \cdot \frac{r}{365} \cdot n \]
#### Explanation:
This formula can be interpreted as representing an interest calculation or a similar financial computation. Below is a breakdown of the components in the equation:
- \( I \): The total interest or the final amount after the calculation.
- \( \overline{B} \): The average balance or the principal amount. The bar over B typically signifies an average value over a period.
- \( \frac{r}{365} \): The daily interest rate. Here, \( r \) is the annual interest rate, and it is divided by 365 to convert it into a daily rate.
- \( n \): The number of days for which the interest is being calculated.
This formula is commonly used in scenarios where interest needs to be computed on a daily basis, such as for savings accounts, loans, or investments that are compounded or calculated daily.
---
By using this formula, students can better understand how interest accumulates over time on a daily basis and can apply it to various financial contexts to determine earnings or costs associated with borrowing or investing money.
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