Answered: a) Find the average daily balance for…

a) Find the average daily balance for the billing period. b) Find the finance charge to be paid on February 17.Assume an interest rate of 1.2% per month. c) Find the balance due on February17.

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter5: Operating Activities: Purchases And Cash Payments

Section: Chapter Questions

Problem 2.10C

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Concept explainers

Cost of Credit

The cost of credit is an extra amount that the borrower has to pay besides the loan amount. These credit charges may vary from loan to loan. The cost of credit includes interest charges, maintenance charges, and arrangement charges. Some of the costs are mandatorily collected by the lender based on the loan amount and tenure of the loan. The cost of credit is also called finance charges of the credit.

Question

The balance on Ramon Felipe's credit card on January 17,his billing date, was $362.79. For the period ending February 17,Ramon had the following transactions to the right.

a) Find the average daily balance for the billing period.

b) Find the finance charge to be paid on February 17.Assume an interest rate of 1.2% per month.

c) Find the balance due on February17.

January 21 Charge:
$50.04
Restaurant meal
January 30 Payment
February 7 Charge:
$120.00
$21.47
Lawn ornaments
February 13 Charge:
$118.64
Microwave oven

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