The credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.2​% of the average daily balance. Calculate parts​ a-d using the statement below. transaction descriptiontransaction amountPrevious​ balance, ​$2654.19 June 1 Billing date June 6 Payment$1100.00 creditJune 8 Charge: gas$35.41June 9 Charge: groceries$138.42June 17 charge: gas $41.68                charge: groceries$127.27June 27 charge: clothing$215.41June 30 end of billing period Payment due date: July 9 A) Find the average daily balance for the billing period. Round to the nearest cent.B) Find the interest to be paid on July​ 1, the next billing date. Round to the nearest cent. (Use the answer from part a to find this answer. Round to the nearest cent as​ needed.)C) Find the balance due on July 1.​(Use the answer from part b to find this​ answer.) D) This credit card requires a​ $30 minimum monthly payment if the balance due at the end of the billing period is less than​ $400. ​ Otherwise, the minimum monthly payment is 1/25 of the balance due at the end of the billing​ period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by July​ 9?​(Use the answer from part c to find this answer. Round up to the nearest​ dollar.)

Question
Asked May 16, 2019
The credit card with the transactions described in the popup below uses the average daily balance method to calculate interest. The monthly interest rate is 1.2​% of the average daily balance. Calculate parts​ a-d using the statement below.
 
transaction description transaction amount
Previous​ balance, ​$2654.19  
June 1 Billing date
 
June 6 Payment
$1100.00 credit
June 8 Charge: gas $35.41
June 9 Charge: groceries $138.42
June 17 charge: gas  $41.68
                charge: groceries $127.27
June 27 charge: clothing $215.41

June 30 end of billing period

 

Payment due date: July 9

 

A) Find the average daily balance for the billing period. Round to the nearest cent.

B) Find the interest to be paid on July​ 1, the next billing date. Round to the nearest cent. (Use the answer from part a to find this answer. Round to the nearest cent as​ needed.)

C) Find the balance due on July 1.
​(Use the answer from part b to find this​ answer.)
 
D) This credit card requires a​ $30 minimum monthly payment if the balance due at the end of the billing period is less than​ $400. ​ Otherwise, the minimum monthly payment is 1/25 of the balance due at the end of the billing​ period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by July​ 9?
​(Use the answer from part c to find this answer. Round up to the nearest​ dollar.)
 
 
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Expert Answer

Step 1

Credit Card

It is a card issued to customers for making payment towards goods and services. These cards are issued by banks or financial institutions which allow the cardholders to borrow money from them in order to make payments for consumption. Each cardholder has a set transaction limit based on his/her credibility. The card issuer charges the holder on the unpaid balance of each month in the subsequent months. The interest rates for this charge is predefined and are different for different institutions.

Step 2

a.

We may compute the average daily balance for the given billing cycle by first tabulating the unpaid balance on each transaction date. We may proceed as follows:

 

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Step 3

Now, we should calculate the product of number of days at each unpaid balance and the amount of unpaid balance.

 

Thus, the total amount of daily unpaid balance for the given billing cycle = $61,479.68

The average daily balance for this period = (Total amount of daily unpaid balance)/Number of days in the billing cycle

Conside...

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