Suppose your VISA card calculates interest using the average daily balance method, and the monthly interest rate is 1.75%. The itemized billing for the month of April is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date April 1 April 3 April 11 April 15 April 28 April 30 May 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 95 755 395 890 845 (c) Find the total balance owed on the last day of the billing period. $
Suppose your VISA card calculates interest using the average daily balance method, and the monthly interest rate is 1.75%. The itemized billing for the month of April is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date April 1 April 3 April 11 April 15 April 28 April 30 May 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 95 755 395 890 845 (c) Find the total balance owed on the last day of the billing period. $
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 VISA card calculates interest using the average daily balance method, and the monthly
interest rate is 1.75%. The itemized billing for the month of April is shown below.
Detail
Unpaid balance
Charge
Charge
Charge
Payment received
Last day of billing period
Payment due date
Date
April 1
April 3
April 11
April 15
April 28
April 30
May 7
(a) Find the average daily balance. $
(b) Find the interest due for this month. $
Amount
95
755
395
890
845
(c) Find the total balance owed on the last day of the billing period. $
(d) This credit card requires a $20 minimum payment or 1/36 of the amount due, whichever is higher. What
is the minimum monthly payment due for this month? $
Expert Solution
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"Since you have posted a question with multiple sub-parts, we will provide the solution only to the first three sub-parts as per our Q&A guidelines. Please repost the remaining sub-parts separately."
The average daily balance is the balance of the card at the day's end divided by the total days in the billing cycle.
The interest due is the amount of interest that is required to be paid for every period.
The total balance owed on the last day of the billing period is the sum of the average daily balance and the interest due.
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