Personal Finance (MindTap Course List)
13th Edition
ISBN: 9781337099752
Author: E. Thomas Garman, Raymond Forgue
Publisher: Cengage Learning
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Alexis Monroe, a biologist from Dyersburg, Tennessee, is curious about the accuracy of the interest charges shown on her most recent credit card billing statement.
Interest Charged
Interest Charge on Purchases
$6.40
Interest Charge on Cash Advances
$4.65
TOTAL INTEREST FOR THIS MONTH
$11.05
Use the average daily balances provided to recalculate the interest charges, and compare the result with the amount shown on the statement. Round your answers to the nearest cent.
Annual Percentage
Balances Subject to
Type of Balance
Rate (APR)
Interest Rate
Interest Charge
Purchases
15.14% (V)
$513.39
$
Cash Advances
22.43% (V)
$252.98
$
Balance Transfers
0.00%
$637.50
$
Penalty APR
28.99%
$ 0.00
$
The credit card with the transactions described in the pop-up below, uses the average daily balance method to calculate interest. The monthly interest rate is 1.7% of the average daily balance calculate parts a-d using a statement in the pop-up.
a. Find the average daily balance, for the billing record round to the nearest cent the average daily balance for the billing period is $__?
b. Find the interest to be paid on July 1, the next billing date. Round to the nearest cent. The interest to be paid on July 1 is $__?
c. Find the balance due on July 1.
The balance due on July 1 is $__?
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? The minimum monthly payment is $__?
The credit card with the transactions described on the right uses the average daily balance method to calculate interest. The monthly interest rate is 2.5% of the average daily balance.
a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $ __?
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