The unpaid balance at the start of a 28-day billing cycle was $990.01. A $6,000 purchase...

The unpaid balance at the start of a 28-day billing cycle was $990.01. A $6,000 purchase was made on the first day of the billing cycle and a $100 payment was credited to the account on day 21. How much interest will be charged at the end of the billing cycle? Assume that the annual interest rate on a credit card is 24.07% and interest is calculated by the average daily balance method.

At the end of the billing cycle, $_______ will be charged in interest.

(Round to the nearest cent as needed)

Expert Solution

Interest =

1675.62

Workings

Avg Daily bal
From	To	Days	Balance	Days*Balance
1-Feb	1-Feb	0	990.01	0.00
1-Feb	21-Feb	20	6990.01	139800.20
21-Feb	28-Feb	8	6890.01	55120.08



	TOTAL	28		194920.28
a	Average daily balance			6961.44
b	Finance charge			1675.62
c	Balance due			8637.06

jeff jeffy answered 6 months ago

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