Chapter 5.1, Problem 45E

You have maxed out your credit card and owe $\$5,000.$ its interest rate is $24\%$. Each month, you make the minimum required payment of $\$40$.

a. During the January $10$ through February $9$ billing period, you pay the minimum required payment on January $25$. Find the average daily balance, the finance charge, and the new balance. (The new balance includes the finance charge.)

b. During the February $10$ through March $9$ billing period, you pay the minimum required payment on March $3$. Find the average daily balance, the finance charge, and the new balance.

c. During the March $10$ through April $9$ billing period, you pay the minimum required payment on March $31$. Find the average daily balance, the finance charge, and the new balance.

d. Discuss the impact of making minimum required payment, both on yourself and on the credit card issuer.