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.DetailDateAmountUnpaid balanceAugust 1$395ChargeAugust 9$1040ChargeAugust 10$800ChargeAugust 18$1115Payment receivedAugust 25$710Last day of billing periodAugust 31 Payment due dateSeptember 7 (a) Find the average daily balance. $(b) Find the interest due for this month. $(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? $

Date Opening balance Debit Credit Closing balance Aug 1 395 - - 395 2 395 - - 395 3 395 - - 395 4 395 - - 395 5 395 - - 395 6 395 - - 395 7 395 - - 395 8 395 - - 395 9 395 1040 - 1,435 10 1435 800 - 2235 11 2235 - - 2235 12 2235 - - 2235 13 2235 - - 2235 14 2235 - - 2235 15 2235 - - 2235 16 2235 - - 2235 17 2235 - - 2235 18 2235 1115 3350 19 3350 - - 3350 20 3350 - - 3350 21 3350 - - 3350 22 3350 - 3350 23 3350 - - 3350 24 3350 - - 3350 25 3350 - 710 2640 26 2640 - - 2640 27 2640 - - 2640 28 2640 - - 2640 29 2640 - - 2640 30 2640 - - 2640 31 2640 - - 2640 Total 2955 710 64405 a. Average balance = Closing balance ÷ Number of days = 64405 / 31 = $2077.58 b. Interest due = Average balance × interest rate = $2077.58 × 1.1% = $22.85 c. Total owned balance at the end of the month = Average balance + Interest rate = $2077.58+$22.85 = $2100.43 d. Minimum monthly payment = $2100.43 / 24 = $87.51. THANK U AND PLEASE LIKE IT....

Answered: Suppose your MasterCard calculates…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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	Date	Amount
Unpaid balance	August 1	$395
Charge	August 9	$1040
Charge	August 10	$800
Charge	August 18	$1115
Payment received	August 25	$710
Last day of billing period	August 31
Payment due date	September 7

(a) Find the average daily balance. $

(b) Find the interest due for this month. $

(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? $

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