You have a credit card that charges an interest rate of 21.35% compounded monthly. The table below shows your activity for the month of April. Date April 1 April 7 April 12 April 14 April 20 April 27 Purchase April 30 Ending Balance Activity Beginning Balance Purchase Payment Purchase Purchase Amount 36.40 -175.00 99.50 17.00 31.00 Balance 600.00 636.40 461.40 560.90 577.90 608.90 608.90 What is the average daily balance for this account? What is the finance charge for the month of April?

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Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.