Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.1%. 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 275 545 680 125 320 (c) Find the total balance owed on the last day of the billing period. $ (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 1.1%. 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 275 545 680 125 320 (c) Find the total balance owed on the last day of the billing period. $ (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
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Transcribed Image Text:Suppose your MasterCard calculates interest using the average daily balance method, and the monthly
interest rate is 1.1%. 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
275
545
680
125
320
(c) Find the total balance owed on the last day of the billing period. $
(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
Average Daily Balance( Credit Card):
The amount of interest to be charged to a borrower on an outstanding loan is determined using the average daily balance technique. It is an accounting technique that credit card issuers most frequently employ to determine the financing costs that are added to any outstanding debt you could have on a credit card.
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Transcribed Image Text:Suppose your MasterCard calculates interest using the average daily balance method, and the monthly
interest rate is 1.1%. The itemized billing for the month of August is shown below.
Detail
Unpaid balance
Charge
Charge
Charge
Payment received
Date
August 1
August 9
August 10
August 18
August 25
August 31
Payment due date September 7
Last day of billing period
(a) Find the average daily balance. $ 1,146.13
(b) Find the interest due for this month. $ 12.61
Amount
275
545
680
125
320
or
(c) Find the total balance owed on the last day of the billing period. $ 1,158.74 x
(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? $ 48.28 X
Solution
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