BUSINESS MATH Exam 2 -Continued Student\'s Name Use the information in the box b
ID: 2737480 • Letter: B
Question
BUSINESS MATH Exam 2 -Continued Student's Name Use the information in the box below to complete items 8-13. Student Number one's credit card billing cycle begins on August 17. He has a previous balance cf $320 00 On ugust 19, Boone pays the credit card company s160, and on August 23, Boone purchases a gift for his sister, Shannon, for $84.50 using the card. On August 30, Boone uses his credit card to buy a $1.240.50 plane ticket to Sydney, Australia. On September 8. Boone pays anodher si0oco to the credit card company. The billing cycle ends on September 16 rate is 3.5%. ticket to Sydney, Australia. On September 8, Boone pays another $10000 16. Boone's monthly periodic . Previous-Balance Method: Finance Charge 9 Unpaid-Balance (Adjusted-Balance) Method: Unpaid Balance- Finance Charge = LO. Average-Daily-Balance Method WITH New Purchases: STEP 1: How many days are in the billing cycle? Number of Days STEP2: Fill in the list below with each end of day balance. balance.Sept Sept 25 Sept 3 Aug 19Aug 26Sept 2 Sept 3 Sept 4___ Sept 11 - Sept 5 Sept l2 Au Aug 25 Sept 2Sept 10 Aug 17 Aug 18- Aug 20Aug 27Sept 3 30Sept Sept Sept 13 6Sept 15 Aug 21 _ _ Aug 28 Aug 22 Aug 29 Aug 23 ._ Aug 24- 28Sept 5 Sept Sept 14_ Aug 30 Aug 31 Sept 7 Sept 8 Sept 16 Sept 1- -Sept 9 STEP 3: Sum of Daily Balances = STEP 4: Average Daily Balance STEP 5: Finance Charge (over) 2328Explanation / Answer
8. Preveous balance Method:
Finance charge = Previous balance x periodic interest rate
= $320 x 0.035= $11.20
9.1. Unpaid balance method:
Finance charge = Unpaid balance x periodic interest rate
Unpaid balance = Previous balance - (Payments+creidits)
Unpaid balance = $320 - 160 - 100 = 60
Finance charge = $60 x 0.035 = $2.10
10. Average daily balance method with new purchaes:
Step I : How many days are there in the bill cycle : 31
Step II: table showing daily balance
________________________________________________________________________________________
Day in billing cycle Beg. balance charge payment ending balance
Aug .17 $320.00 -- -- 320
Aug.18 320.00 -- -- 320
Aug. 19 320.00 -- 160 160
Aug.20 160 -- -- 160
Aug. 21 160 -- -- 160
Aug.22 160 -- -- 160
Aug. 23 160 84,50 - 244.50
Aug.24 244.50 -- -- 244.50
Aug.25 244.50 -- -- 244.50
Aug.26 244.5 -- -- 244.50
Aug. 27 244.5 -- -- 244.50
Aug. 28 244.50 -- -- 244.50
Aug. 29 244.50 -- -- 244.50
Aug. 30 244.50 1.240.50 -- 1,485.00
Aug. 31 1,485.00 -- -- 1,485.00
Sept.1 1,485.00 -- -- 1,485.00
Sept.2 1,485.00 -- -- 1,485.00
Sept.3 1,485.00 -- -- 1,485.00
Sept.4 1485.00 -- -- 1,485.00
Sept.5 1,485.00 -- -- 1,485.00
Sept.6 1,485.00 -- -- 1,485.00
Sept.7 1,485.00 -- -- 1,485.00
Sept.8 1,485.00 -- 100 1,385.00
Sept.9 1,385.00 - -- 1,385.00
Sept.10 1,385.00 -- -- 1,385.00
Sept.11 1,385.00 -- -- 1,385.00
Sept.12 1,385.00 -- -- 1,385.00
Sept.13 1,385.00 -- -- 1,385.00
Sept.14 1,385.00 -- -- 1,385.00
Sept.15. 1,385.00 -- -- 1,385.00
Sept.16 1,385.00 -- -- 1,385.00
Sum of daily balances 28,821.50
Step III:Sum of daily balances = $28,821.50
Step IV: Average daily balance = $28,821/30 = 960.72
Step V: Finance charge = Average daily balance x periodic interest rate = $960.72 x 0.035 =$33.63
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