On August 10, a credit card account had a balance of $335. A purchase of $52 was made on August 15, and $153 was charged on August 27. A payment of $77 was made on August 15. The interest on the average daily balance is 1.25% per month. Find the finance charge on the September 10 bill. (Round your answer to two decimal places.)

Question
Asked Nov 6, 2019

On August 10, a credit card account had a balance of $335. A purchase of $52 was made on August 15, and $153 was charged on August 27. A payment of $77 was made on August 15. The interest on the average daily balance is 1.25% per month. Find the finance charge on the September 10 bill. (Round your answer to two decimal places.)

check_circleExpert Solution
Step 1

The average daily balance can be calculated by dividing the number of days from the sum amount owed every day.

Step 2

Sum amount owed every day can be calculated as:

Payments
(a)
Number of days
(e)
Total balance
(b)*(c)
Date
Balance on
mentioned
dates
(b)
$335
10th August to
14th August
15th August to
26th August
27th August to
09 September
Total
5
$1,675
$3,720
$52-$77
$310
12
$157
$463
14
$6,482
31
$11,877
help_outline

Image Transcriptionclose

Payments (a) Number of days (e) Total balance (b)*(c) Date Balance on mentioned dates (b) $335 10th August to 14th August 15th August to 26th August 27th August to 09 September Total 5 $1,675 $3,720 $52-$77 $310 12 $157 $463 14 $6,482 31 $11,877

fullscreen
Step 3

Average daily balance w...

Total balance
Average daily balance
Number of days
$11,877
31
- $383.12
help_outline

Image Transcriptionclose

Total balance Average daily balance Number of days $11,877 31 - $383.12

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour*

See Solution
*Response times may vary by subject and question
Tagged in

Business

Finance

Related Finance Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Calculate the price of a 5.6 percent coupon bond with 10 years left to maturity and a market interes...

A: Face Value of Bond = $1,000Coupon Rate = 5.6%Type of coupon payment = SemiannualNumber of Coupon pay...

question_answer

Q: Your full-service brokerage firm charges $195 per stock trade.How much money do you receive after se...

A: Calculate the amount to be received as follows:

question_answer

Q: Which of the following is the most correct answer for the beta of a portfolio of 35 stocks where the...

A: The beta of the portfolio will be between 0.84 and 1.51 is the most correct answer for the beta of a...

question_answer

Q: 6. A company just issued a 15-year bond that has a face value of $1,000 and a coupon rate of 10% Sim...

A: The price of a bond consists present value of all future coupon payments and the redemption payment....

question_answer

Q: Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an ave...

A: Calculation of the Total Risk Level of Night Ryder Stocks, WholeMart Stocks and Fruit Fly Stocks usi...

question_answer

Q: The next dividend payment by Grenier, Inc., will be $1.72 per share. The dividends are anticipated t...

A: The interest rate that an investor expects from the investment made is known as required rate of ret...

question_answer

Q: Lee Remick read the following partial advertisement: price, $22,500; down payment, $1000 cash or tra...

A: Price = $22,500Down Payment = $1,000Loan Amount (pv) = $22,500 - $1,000 = $21,500Monthly Installment...

question_answer

Q: Can someone please just give me the right answer to the right decimal places for the last part, "How...

A: Future Value = $860,000Interest Rate = 6.5%Interest Rate during a Period = 6.5% ÷ 4 = 1.625%Type of ...

question_answer

Q: You purchase a home and secure a 30 year equal payment loan for $200,000 at a interest rate of 5.25%...

A: The number of months to stay will be around 6 months.