Business

FinanceQ&A LibrarySidney took a $300 cash advance by using checks linked to her credit card account. The bank charges a 2 percent cash advance fee on the amount borrowed and offers no grace period on cash advances. Sidney paid the balance in full when the bill arrived.a)What was the cash advance fee?b)What was the interest for one month at an APR of 20 percent?c)What was the total amount she paid?d)What if she had made the purchase with her credit card and paid off her bill in full promptly? Assume the credit card has a grace period.Question

Asked Feb 13, 2020

2 views

Sidney took a $300 cash advance by using checks linked to her credit card account. The bank charges a 2 percent cash advance fee on the amount borrowed and offers no grace period on cash advances. Sidney paid the balance in full when the bill arrived.

a)What was the cash advance fee?

b)What was the interest for one month at an APR of 20 percent?

c)What was the total amount she paid?

d)What if she had made the purchase with her credit card and paid off her bill in full promptly? Assume the credit card has a grace period.

Step 1

Here I am giving answer for the first 3subparts only.

Step 2

**a)**

**The computation of cash advance fee is as follows:**

Hence, the cash advance fee is** $6.**

Step 3

**b)**

**The computation of interest for the one month is as follows:**

Hence, the interest for the 1 month is** $5.**

Tagged in

Find answers to questions asked by student like you

Show more Q&A

Q: • Massey Machine Shop is considering a project to improve their production efficiency. They are tr...

A: The calculation of the NPV is shown below: Massey Machine Shop should not buy the new automated inj...

Q: 11. You are given the following information about two computer software firms and the S&P 500 Index:...

A: Growth duration of the company relative to S&P 500 can be calculated using the below formula, he...

Q: ndustrial Electric Services has a contract with an embassy in Mexico to provide maintenance for scan...

A: We need to use the concept of time value of money to solve the question. According to the concept of...

Q: Explain the formula for cum dividends

A: Distribution of profit to shareholders occurs mostly in the form of dividends. Though, high growth c...

Q: Here are the cash flows for a project under consideration: C0 C1 C2 −$7,510 +$5,420 ...

A: a) Computation of NPV is as follows: Hence, the NPV is $17110. Working note:

Q: A 15-year Treasury bond is issued with face value of $1,000, paying interest of $58 per year. If mar...

A: The coupon rate can be calculated as:

Q: Top hedge fund manager Sally Buffit believes that a stock with the same market risk as the S&P 5...

A: The discount rate on the stock can be calculated as follows: Stock discount rate = Risk free rate ex...

Q: Anle Corporation has a current price of $20, is expected to pay a dividend of $1 in one year, and it...

A: Expected dividend yield is calculated below:

Q: Dave Scott's total income is $52,000, but his taxable income is only $39,625. Therefore, his tax lia...

A: The total income is $52,000.Taxable income is $39,625.Tax liability is $5,763.