Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.6%. The itemized billing for the month of August is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date August 1 August 9 August 10 August 18 August 25 August 31 September 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 1085 125 1130 140 995 (c) Find the total balance owed on the last day of the billing period. $ 1,514.97 (d) This credit card requires a $15 minimum payment or 1/24 of the amount due, whichever is higher. What is the minimum monthly payment due for this month? $
Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.6%. The itemized billing for the month of August is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date August 1 August 9 August 10 August 18 August 25 August 31 September 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 1085 125 1130 140 995 (c) Find the total balance owed on the last day of the billing period. $ 1,514.97 (d) This credit card requires a $15 minimum payment or 1/24 of the amount due, whichever is higher. What is the minimum monthly payment due for this month? $
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
Related questions
Question
Transcribed Image Text:Suppose your MasterCard calculates interest using the average daily balance method, and the monthly
interest rate is 1.6%. The itemized billing for the month of August is shown below.
Detail
Unpaid balance
Charge
Charge
Charge
Payment received
Last day of billing period
Payment due date
Date
August 1
August 9
August 10
August 18
August 25
August 31
September 7
(a) Find the average daily balance. $
(b) Find the interest due for this month. $
Amount
1085
125
1130
140
995
(c) Find the total balance owed on the last day of the billing period. $ 1,514.97 Or
(d) This credit card requires a $15 minimum payment or 1/24 of the amount due, whichever is higher. What
is the minimum monthly payment due for this month? $
Expert Solution
Step 1: Given Information:
The average daily balance method is used to calculate the interest rate that will be applied to a borrower on a loan that is still open. In order to calculate the financing expenses that are applied to any outstanding debt you could have on a credit card, credit card issuers most usually use this accounting technique.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education