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Context: If you have a credit card charging 28% interest. Based on the following information, how much would be due if paid on January 30? Purchase Amount Purchase date Shoes $145 January 1 Jacket $320 January 5 The statement is dated January 7. The grace period is 20 days How much would be owing if paid on January 30 Answer is 474.36

Question

Context: If you have a credit card charging 28% interest. Based on the following information, how much would be due if paid on January 30? Purchase Amount Purchase date Shoes 145January1Jacket145 January 1 Jacket 320 January 5 The statement is dated January 7. The grace period is 20 days How much would be owing if paid on January 30 Answer is 474.36

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Solution

Sure, here's how you can calculate the amount due:

  1. First, identify the purchases made before the statement date (January 7). In this case, it's the shoes for 145andthejacketfor145 and the jacket for 320. So, the total amount due on the statement date is 145+145 + 320 = $465.

  2. Next, calculate the number of days each purchase was carried beyond the grace period (20 days after the statement date). The shoes were carried for 30 - (1 + 20) = 9 days, and the jacket for 30 - (5 + 20) = 5 days.

  3. Now, calculate the interest for each purchase. The annual interest rate is 28%, so the daily rate is 28% / 365 = 0.0767%.

    For the shoes: 145∗0.0767145 * 0.0767% * 9 days = 1.00 For the jacket: 320∗0.0767320 * 0.0767% * 5 days = 1.23

  4. Finally, add the interest to the total amount due: 465+465 + 1.00 + 1.23=1.23 = 467.23

So, if paid on January 30, the amount due would be $467.23.

Please note that the answer provided in the question ($474.36) seems to be incorrect based on the given information and calculations.

This problem has been solved

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