You have maxed out your credit card and owe $4,100. Its interest rate is 21%. Ea

Question

You have maxed out your credit card and owe $4,100. Its interest rate is 21%. Each month, you make the minimum required payment of $39. (Round your answers to the nearest cent.)

(a) During the September 20 through October 19 billing period, you pay the minimum required payment on October 1. Find the average daily balance, the finance charge, and the new balance.

average daily balance $ 4075.30 Correct:

finance charge $ 70.34 Correct:

new balance $ 4131.34 Correct:

(b) During the October 20 through November 19 billing period, you pay the minimum required payment on November 11. Find the average daily balance, the finance charge, and the new balance.

-average daily balance $

- finance charge $

-new balance $

(c) During the November 20 through December 19 billing period, you pay the minimum required payment on November 30. Find the average daily balance, the finance charge, and the new balance.

average daily balance $

finance charge $

new balance $

Explanation / Answer

Solution:

Billing Cycle Opening Balance Minimum required payment date Payment Amount Finance Charge Average daily balance Closing Balance Details Amount Details Amount Sep 20 to Oct 19 $4,100.00 1-Oct $39.00 (4100*11*21%/365) + (4061*19*21%/365) $70.34 [(4100*11) + (4061*19)]/30 $4,075.30 $4,131.34 Oct 20 to Nov 19 $4,131.34 11-Nov $39.00 (4131.34*22*21%/365) + (4092.34*9*21%/365) $73.48 [(4131.34*22) + (4092.34*9)]/31 $4,120.02 $4,165.82 Nov 20 to Dec 19 $4,165.82 30-Nov $39.00 (4165.82*10*21%/365) + (4126.82*20*21%/365) $71.45 [(4165.82*10) + (4126.82*20)]/30 $4,139.82 $4,198.28

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