The information from the box on the previous page is repeated below for your con
ID: 2739842 • Letter: T
Question
The information from the box on the previous page is repeated below for your convenience. Boone's credit card billing cycle begins on August 17. He has a previous balance of $320.00. On August 19, Boone pays the credit card company $160, 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 another $100, 00 to the credit card company. The billing cycle ends on September 16. Boone's monthly periodic rate is 3.5%.Explanation / Answer
Ans;
FINANCE CHARGE UNDER PREVIOUS BALANCE METHOD
PREVIOUS BALANCE=$320
FINANCE CHARGE=PREVIOUS BALANCE*RATE=$320*3.5%=$11.2
9.UNPAID BALANCE METHOD
UNPAID BALANCE=$320-$160+$84.5+1,240.5-$100=$1,385
FINANCE CHARGE=$1,385*3.5%=$48.48
10.STEP 1:DAYS IN BILLING CYCLE=31 DAYS
STEP 2.EACH END DAY BALANCE
STEP 3. SUM OF DAILY BALANCES=$ 28,821.50
STEP 4: AVERAGE DAILY BALANCE= $28,821.50 / 31 DAYS= $929.73
STEP 5: FINANCE CHARGE= $929.73 * 3.50%= $32.54
DATE AMOUNT OUTSTANDING($) AUG 17 320 AUG 18 320 AUG 19 160 AUG 20 160 AUG 21 160 AUG 22 160 AUG 23 244.5 AUG 24 244.5 AUG 25 244.5 AUG 26 244.5 AUG 27 244.5 AUG 28 244.5 AUG 29 244.5 AUG 30 1,485 AUG 31 1,485 SEP 1 1,485 SEP 2 1,485 SEP 3 1,485 SEP 4 1,485 SEP 5 1,485 SEP 6 1,485 SEP 7 1,485 SEP 8 1,385 SEP 9 1,385 SEP 10 1,385 SEP 11 1,385 SEP 12 1,385 SEP 13 1,385 SEP 14 1,385 SEP 15 1,385 SEP 16 1,385Related Questions
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