Question

In: Finance

Your current credit card balance (Day 0) is $1945. You will make the following purchases. -...

Your current credit card balance (Day 0) is $1945. You will make the following purchases.

- Day 1: $120 worth of groceries

- Day 2: $250 for books

- Day 15: A bike that costs $1,205

- Day 23: $75 impulse buy.

Your non-penalty interest rate is 17.7% (expressed as an annual percentage rate, compounded daily). Assume 365 days per year. Interest accrues at midnight on each day (in other words, after payments or charges are considered). For example, if you spend $100 today a full day’s worth of interest will accrue at midnight; if you make a payment of $200 today your interest charge will reflect the reduction in your balance from that payment.

If you make payments of $874 on Day 13 and $675 on Day 19, what will be your credit card balance on Day 30?

A: between $2008 and $2028

B: between $2028 and $2048

C: between $2048 and $2068

D: between $2068 and $2088

E: between $2088 and $2108

F: answer not in this range.

Expert Solution

Credit Card Balance on Day 30:

Credit Card Balance on Day 30 is $2,077.87 --- option D, between $2,068 and $2,088

Workings

jeff jeffy answered 2 years ago

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