Question

The credit card with the transactions described on the right uses the average daily balance method to calculate interest. The monthly interest rate is .5​% of the average daily balance. Calculate parts​ a-d using the statement on the right.		Transaction Description	Transaction Amount
		Previous​ balance, ​$6240.00
		March 1 Billing date
		March 5 Payment	​$400.00 credit
		March 7​ Charge: Restaurant	​$50.00
		March 12​ Charge: Groceries	​$70.00
		March 21​ Charge: Car Repairs	​$260.00
		March 31 End of billing period
		Payment Due​ Date: April 9

a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is ______________ ​(Round to the nearest cent as​ needed.)

b. Interest paid by April 1st __________

c. Balance due on April 1st ________

d. Minimum Monthly Payment ______

This credit card requires a​ $10 minimum monthly payment if the balance due at the end of the billing period is less than​ $360. ​ Otherwise, the minimum monthly payment is 1/36 (fraction 1/36) of the balance due at the end of the billing​ period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by April​ 9?

Answer 1

Answer (A)

date	type of transaction	amount	remaining balance(d)	Days(e)	D*E
MARCH 1	billing date		6240	4	24960
MARCH 5	payment(credit)	400	5840	2	11680
MARCH 7	retaurant	50	5890	5	29450
MARCH 12	groceries	70	5960	9	53640
MARCH 21	car repairs	260	6220	10	62200
MARCH 31
				TOTAL= 30 days	total sum=181930

average daily balance would be :- 181930/30

= 6064.3(roubd off)

ANSWER (B)

Interest paid by April 1st __________

= average daily balance * interest rate

= 6064.3 * 5%

= 303.215 or 303.22

ANSWER (C)  

Balance due on April 1st ________

date	type of transaction	amount	remaining balance(d)
MARCH 1	billing date		6240
MARCH 5	payment(credit)	400	5840
MARCH 7	retaurant	50	5890
MARCH 12	groceries	70	5960
MARCH 21	car repairs	260	6220
MARCH 31	interest payble as calculates in part B of answer	303.22	6523.22

Answer to this part is $6523.22 or rounding off to $6523

ANSWER (D):-

Minimum Monthly Payment ______

As mentiond in the question This credit card requires a​ $10 minimum monthly payment if the balance due at the end of the billing period is less than​ $360.​ Otherwise, the minimum monthly payment is 1/36 (fraction 1/36) of the balance due at the end of the billing​ period, accordingly it will be such as,

= Due balance as calculated in answer(c) * 1/36

= 181.194 or round off to $181

Therefore answer is $181