You have a credit card that charges an interest rate of 17.2% compounded monthly. The table below showsyour activity for the month of April.DateApril 1ActivityBeginning BalanceAmountBalance1,225.00April 10Purchase29.501.254.50April 11Payment-150.001,104.50April 15Purchase99.251,203.75April 19Purchase18.001,221.75April 21Purchase30.301,252.05April 30 Ending Balance1,252.05What is the average daily balance for this account?SWhat is the finance charge for the month of April?S

The average daily balance method is a common way of calculating credit card interest charges. It is…

Answered: You have a credit card that charges an…

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 1.9%. The itemized billing for the month of August is shown below The average daily balance has already been computed and is $2739.52. (a) Find the interest due for this month. $ (b) Find the total balance owed on the last day of the billing period. $ (c) 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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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? $
You have a credit card that charges an interest rate of 14.85% compounded monthly using the average daily balance method. The table below shows your activity for the month of July. Activity Beginning Balance Purchase Date July 1 July 9 July 14 Payment July 15 Purchase July 16 Purchase July 26 Purchase July 31 Ending Balance Amount 47.81 -225.00 82.38 18.15 38.8 Balance 697.52 745.33 520.33 602.71 620.86 659.66 659.66 What is the average daily balance for this account? What is the finance charge for the month of July?
Calculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. PreviousBalance AnnualPercentageRate (APR) MonthlyPeriodicRate(as a %) FinanceCharge(in $) Purchasesand CashAdvances PaymentsandCredits NewBalance(in $) $1,026.61 1.75% $322.20 $300.00 Step 1 In the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated. PreviousBalance AnnualPercentageRate (APR) MonthlyPeriodicRate(as a %) FinanceCharge(in $) Purchasesand CashAdvances PaymentsandCredits NewBalance(in $) $1,026.61 1.75% $322.20 $300.00 Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula. monthly periodic rate = APR 12 By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR. APR = monthly periodic rate ✕ 12 The…
You have a credit card that charges an interest rate of 10.95% compounded monthly. The table below shows your activity for the month of April. Date April 1 April 3 April 9 April 20 April 24 April 26 April 30 Ending Balance Activity $ Beginning Balance Purchase $ Payment Purchase Purchase Purchase Balance 1,175.00 35.70 1,210.70 -300.00 910.70 92.00 1,002.70 15.00 1,017.70 64.70 1,082.40 1,082.40 What is the average daily balance for this account? Amount How much interest is owed this month? How much total money is owed at the end of the month?
You have a credit card that charges an interest rate of 18.55% compounded monthly. The table below shows your activity for the month of April. Date April 1 April 6 April 7 Payment April 8 Purchase April 18 Purchase April 20 Purchase April 30 Ending Balance Activity Beginning Balance Purchase $ Balance 1,375.00 45.80 1,420.80 -250.00 1,170.80 89.75 1,260.55 18.00 1,278.55 63.80 1,342.35 1,342.35 What is the average daily balance for this account? $ Amount What is the finance charge for the month of April?
Calculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. PreviousBalance AnnualPercentageRate (APR) MonthlyPeriodicRate(as a %) FinanceCharge(in $) Purchasesand CashAdvances PaymentsandCredits NewBalance(in $) $45.00 12% % $ $176.20 $55.00 $
You have a credit card that charges an interest rate of 15.8% compounded monthly. The table below shows your activity for the month of April. Date Activity Amount Balance April 1 Beginning Balance 975.00 April 6 Purchase 46.10 1,021.10 April 13 Payment −250.00 771.10 April 16 Purchase 81.50 852.60 April 22 Purchase 12.00 864.60 April 26 Purchase 30.20 894.80 April 30 Ending Balance 894.80 What is the average daily balance for this account?$What is the finance charge for the month of April?
Use the average daily balance method to compute the finance charge on the credit card account for the month of August (31 days). The starting balance from the previous month is $290. The transactions on the account for the month are given in the table to the right. Assume an annual interest rate of 21% on the account and that the billing date is August 1st. (see image for table.) The finance charge for the month of August is $___
K Use the average daily balance method to compute the finance charge on the credit card account for the month of August (31 days). The starting balance from the previous month is $240. The transactions on the account for the month are given in the table to the right. Assume an annual interest rate of 20% on the account and that the billing date is August 1st. The finance charge for the month of August is $ (Round to the nearest cent as needed.) Date August 5 Transaction Made payment of $88 August 14 Charged $140 for hiking boots August 21 Charged $18 for gasoline August 25 Charged $34 for restaurant meal
ou have a credit card that charges an interest rate of 15.65% compounded monthly. The table below shows your activity for the month of April. Date Activity Amount Balance April 1 Beginning Balance 1,375.00 April 8 Purchase 41.60 1,416.60 April 15 Payment −175.00 1,241.60 April 17 Purchase 93.00 1,334.60 April 20 Purchase 14.00 1,348.60 April 28 Purchase 35.30 1,383.90 April 30 Ending Balance 1,383.90 What is the average daily balance for this account?$What is the finance charge for the month of April?

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