You have a credit card that charges an interest rate of 15.1% compounded monthly. The table below shows your activity for the month of April. Date April 1 April 5 April 7 April 15 April 20 Purchase April 28 Purchase April 30 Ending Balance Activity Beginning Balance Purchase Payment Purchase $ Amount Balance 850.00 896.20 721.20 820.45 833.45 875.45 875.45 46.20 -175.00 99.25 13.00 42.00 What is the average daily balance for this account? $ What is the finance charge for the month of April?
You have a credit card that charges an interest rate of 15.1% compounded monthly. The table below shows your activity for the month of April. Date April 1 April 5 April 7 April 15 April 20 Purchase April 28 Purchase April 30 Ending Balance Activity Beginning Balance Purchase Payment Purchase $ Amount Balance 850.00 896.20 721.20 820.45 833.45 875.45 875.45 46.20 -175.00 99.25 13.00 42.00 What is the average daily balance for this account? $ What is the finance charge for the month of April?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You have a credit card that charges an interest rate of 15.1% compounded monthly. The table below shows
your activity for the month of April.
Date
April 1
April 5
April 7
April 15
April 20
April 28
April 30 Ending Balance
Activity
Beginning Balance
Purchase
$
Payment
Purchase
Purchase
Purchase
Amount
46.20
-175.00
99.25
13.00
42.00
Balance
850.00
896.20
721.20
820.45
833.45
875.45
875.45
What is the average daily balance for this account?
What is the finance charge for the month of April?
Expert Solution
Step 1
A finance charge is a fee incurred when using debt or lending money that already exists. Finance costs may be based on a fixed rate or a proportion of borrowings; the latter is more typical. A finance charge is usually made up of the cost of servicing the debt as well as any related processing fees, accounts management fees, or late fees imposed by the lender.
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