Asked by Kimberly Medlin on Jun 17, 2024
Verified
Jackson and Kate Jones do not pay their credit card in full each month,so they incur finance charges.On their last credit card statement,the average daily balance is $875,and the monthly periodic rate is 2.25%.What should be the finance charge on the statement?
A) $19.69
B) $20.25
C) $87.50
D) $196.88
Finance Charges
The total cost of borrowing, including interest and other fees, charged on credit accounts or loans.
Periodic Rate
The Periodic Rate is the interest rate applied to a loan or savings account for a specific period, crucial in calculating the interest over that timeframe.
- Calculate adjusted totals and financial expenses on credit card bills.
Verified Answer
AM
Alyssa MontesJun 17, 2024
Final Answer :
A
Explanation :
The finance charge can be calculated by multiplying the average daily balance by the monthly periodic rate: $875 * 2.25% = $19.6875, which rounds to $19.69.
Learning Objectives
- Calculate adjusted totals and financial expenses on credit card bills.
Related questions
According to the Credit Calendar Below,what Is the Average Daily ...
Regina Pays Her Credit Card Balance in Full Each Month ...
Yanni Received Her Monthly Credit Card Statement in the Mail,the ...
Last Month,the Ending Balance on Maryanne's MasterCard Was $1,789,the Average ...
Thompson Lubricating Store Has the Following Credit Terms: The Finance ...