You have an account with a $1000 credit limit that charges 12.25% interest using the average daily balance method. Assuming a 30 day month, you start with a balance of $200 on Day 1. On Day 5, you charge $50 and you pay $150 on Day 15. What is your average daily balance, assuming charges and payments begin the next day? Round your answer to 2 decimal places.

You have an account with a $1000 credit limit that charges 12.25% interest using the average daily balance method. Assuming a 30 day month, you start with a balance of $200 on Day 1. On Day 5, you charge $50 and you pay $150 on Day 15. What is your average daily balance, assuming charges and payments begin the next day? Round your answer to 2 decimal places.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 21E

See similar textbooks

Similar questions

A customer takes out a loan of $130,000 on January 1, with a maturity date of 36 months, and an annual interest rate of 11%. If 6 months have passed since note establishment, what would be the recorded interest figure at that time? A. $7,150 B. $65,000 C. $14,300 D. $2,383
Whole Leaves wants to upgrade their equipment, and on January 24 the company takes out a loan from the bank in the amount of $310,000. The terms of the loan are 6.5% annual interest rate, payable in three months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on February 24, and the entry for payment of the short-term note and final interest payment on April 24. Round to the nearest cent if required.
Marathon Peanuts converts a $130,000 account payable into a short-term note payable, with an annual interest rate of 6%, and payable in four months. How much interest will Marathon Peanuts owe at the end of four months? A. $2,600 B. $7,800 C. $137,800 D. $132,600
Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.
You have an account with a $1500 credit limit that charges 13.25% interest using the average daily balance method. Assuming a 30-day month, you start with a balance of $350 on Day 1. On Day 5, you charge $100, and you pay $60 on Day 15. What is your average daily balance, assuming charges and payments begin the next day? Round your answer to 2 decimal places and do not include the dollar sign
Assume you have a balance of $1000 on a credit card with an APR of 24%, or 2% per month. You start making monthly payments of $200, but at the same time you charge an additional $90 per month to the credit card. Assume that interest for a given month is based on the balance for the previous month. The following table shows how you can calculate your monthly balance. Complete and extend t the debt is paid off. How long does it take to pay off the credit card debt?
If a credit card has a 30-day billing period, a 20-day grace period, and charges an interest rate of 20%, compounded daily, how much interest will be charged on a $5000 average monthly balance which gets paid 40 days after the statement due date using the average daily balance method?
You have maxed out your credit card and owe $5,100. Its interest rate is 21%. Each month, you make the minimum required payment of $31. (Round your answers to the nearest cent.) (a) During the September 20 through October 19 billing period, you pay the minimum required payment on October 1. Find the average daily balance, the finance charge, and the new balance. average daily balance $ finance charge $ new balance $ (b) During the October 20 through November 19 billing period, you pay the minimum required payment on November 11. Find the average daily balance, the finance charge, and the new balance. average daily balance $ finance charge $ new balance $ (c) During the November 20 through December 19 billing period, you pay the minimum required payment on November 30. Find the average daily balance, the finance charge, and the new balance. average daily balance $ finance charge $ new balance $ (d) Discuss the impact of making the…
Suppose you deposit D dollars at the beginning of each month into an account that pays a monthly rate of r as a decimal. Then, the balance B of the account after t months is given by B = D(1 + r) (1 + r)t − 1 r dollars. Suppose you deposit $160 at the beginning of each month into an account that pays a monthly rate of r = 0.005, which corresponds to an APR of 6%. How long does it take for the account balance to build to $2600? Report your answer to the nearest whole month. months
calculate the monthly finance charge for the credit card transaction. Know that it takes 10 days for a payment to be received and recorded and that the month has 30 days . Round to the nearest cent. $4000 balance, 16%, $2500 payment what was the previous balance and the adjusted balance?
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answers to the nearest cent.) $300 balance, 15%, $50 payment
Calculate the monthly finance charge for the credit card transaction. Assume that it takes 10 days for a payment to be received and recorded, and that the month is 30 days long. (Round your answer to the nearest cent.) $950 balance, 15%, $900 payment; average daily balance method