Knowee
Questions
Features
Study Tools

The activity on Marny Zell's MasterCard account for one billing period is shown below. Find the average daily balance and the finance charge if the billing period is June 26 through July 25, the previous balance was $396.83, and the annual interest rate is 19.5%.June 30     payment     $100.00July 2     gasoline     $31.32July 10     restaurant     $58.00

Question

The activity on Marny Zell's MasterCard account for one billing period is shown below. Find the average daily balance and the finance charge if the billing period is June 26 through July 25, the previous balance was 396.83,andtheannualinterestrateis19.5396.83, and the annual interest rate is 19.5%.June 30     payment     100.00July 2     gasoline     31.32July10    restaurant    31.32July 10     restaurant     58.00

🧐 Not the exact question you are looking for?Go ask a question

Solution

To find the average daily balance and the finance charge, follow these steps:

Step 1: Calculate the daily balances

  • June 26 - June 30: $396.83 for 5 days
  • June 30 - July 2: (396.83−396.83 - 100) = $296.83 for 2 days
  • July 2 - July 10: (296.83+296.83 + 31.32) = $328.15 for 8 days
  • July 10 - July 25: (328.15+328.15 + 58) = $386.15 for 15 days

Step 2: Calculate the sum of the daily balances

  • (5 days * 396.83)+(2days∗396.83) + (2 days * 296.83) + (8 days * 328.15)+(15days∗328.15) + (15 days * 386.15)

Step 3: Divide the sum of the daily balances by the number of days in the billing period to get the average daily balance

  • Sum of daily balances / 30 days

Step 4: Calculate the finance charge

  • Average daily balance * (annual interest rate / 365 days) * number of days in the billing period

Let's calculate:

Step 1: Calculate the daily balances

  • June 26 - June 30: $396.83 for 5 days
  • June 30 - July 2: $296.83 for 2 days
  • July 2 - July 10: $328.15 for 8 days
  • July 10 - July 25: $386.15 for 15 days

Step 2: Calculate the sum of the daily balances

  • (5 days * 396.83)+(2days∗396.83) + (2 days * 296.83) + (8 days * 328.15)+(15days∗328.15) + (15 days * 386.15) = 1984.15+1984.15 + 593.66 + 2625.2+2625.2 + 5792.25 = $10995.26

Step 3: Divide the sum of the daily balances by the number of days in the billing period to get the average daily balance

  • 10995.26/30days=10995.26 / 30 days = 366.51

Step 4: Calculate the finance charge

  • 366.51∗(19.5366.51 * (19.5% / 365 days) * 30 days = 5.94

So, the average daily balance is 366.51andthefinancechargeis366.51 and the finance charge is 5.94.

This problem has been solved

Similar Questions

Calculate the finance charge for a credit card that has the given average daily balance and interest rate. (Round your answer to the nearest cent.)Average daily balance: $113.31; monthly interest rate: 1.55%

A charge account had a balance of $972 on May 5. A purchase of $223 was made on May 17, and a payment of $125 was made on May 20. The interest on the average daily balance is 1.6% per month. Find the finance charge on the June 5 bill. (Round your answer to the nearest cent.)

You have lost the benefit of an interest free period on your credit card. The balance of your credit card is $1,200 for the first 5 days of the statement period then $2,000 for the next 22 days and finally $2,300 for the last 3 days of the statement period. The annual interest rate on the credit card is 19%. There are 365 days in a year.Calculate the interest charged at the end of the statement period. [Express your result with 2 decimal places] Do not type any $ sign.

Consider the following credit card bank statement. In October, the cardholder was NOT benefitting from an interest free period. In order to not pay interest on purchases of the next statement period, the credit card holder needs to transfer into the credit card account at leastA.$77 as soon as the statement is received. B.$3,868.56 by 14th November.C.$3,868.56  plus any new purchases done in the next statement to bring the balance to 0.D.$77 by 14th November

Mia received a credit card offer in the mail. The credit card has an annual percentage rate of 26%. What is the approximate monthly interest rate that will apply to any unpaid balances on this credit card? Assume 12 equal months.Select answer from the options below26.0%.13.0%.4.1%.2.17%.

1/1

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.