Shiing Shen Chern's credit card company determines his minimum monthly payment by adding all new interest to 1% of the outstanding principal. The credit card company charges an interest rate of 0.042243% per day. On March 11, Shiing uses his credit card to purchase airline tickets for his family for $2300. He makes no other purchases during March. Use the given information and the rule that minimum payments are rounded up to the nearest dollar to answer parts a and b below. a) Assuming Shiing had no new interest, determine Shiing's minimum payment due on April 1, his billing date. Shiing's minimum payment due on April 1 is $nothing. b) On April 1, instead of making the minimum payment, Shiing makes a payment of $400. Assuming there are no additional charges or cash advances, determine Shiing's minimum payment due on May 1.
Shiing Shen Chern's credit card company determines his minimum monthly payment by adding all new interest to 1% of the outstanding principal. The credit card company charges an interest rate of 0.042243% per day. On March 11, Shiing uses his credit card to purchase airline tickets for his family for $2300. He makes no other purchases during March. Use the given information and the rule that minimum payments are rounded up to the nearest dollar to answer parts a and b below. a) Assuming Shiing had no new interest, determine Shiing's minimum payment due on April 1, his billing date. Shiing's minimum payment due on April 1 is $nothing. b) On April 1, instead of making the minimum payment, Shiing makes a payment of $400. Assuming there are no additional charges or cash advances, determine Shiing's minimum payment due on May 1.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.6AP
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Question
Shiing Shen Chern's credit card company determines his minimum monthly payment by adding all new interest to 1% of the outstanding principal. The credit card company charges an interest rate of
0.042243%
per day. On March
11,
Shiing uses his credit card to purchase airline tickets for his family for
$2300.
He makes no other purchases during March. Use the given information and the rule that minimum payments are rounded up to the nearest dollar to answer parts a and b below.a) Assuming Shiing had no new interest, determine Shiing's minimum payment due on April 1, his billing date.
Shiing's minimum payment due on April 1 is
$nothing.
b) On April 1, instead of making the minimum payment, Shiing makes a payment of
$400.
Assuming there are no additional charges or cash advances, determine Shiing's minimum payment due on May 1.Expert Solution
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