the following table shows the balance on a credit card over the period of 1 month, that charges a 18% apr…

the following table shows the balance on a credit card over the period of 1 month, that charges a 18% apr (interest rate).\n| days | balance | description |\n| 1 - 3 | $150 | initial balance |\n| 4 - 20 | $200 | $50 purchase |\n| 21 - 30 | $50 | $150 payment |\nwhat is the finance charge, on the average daily balance, for this card over this 1 month period?\nfinance charge = $?\nround to the nearest cent.

the following table shows the balance on a credit card over the period of 1 month, that charges a 18% apr (interest rate).\n| days | balance | description |\n| 1 - 3 | $150 | initial balance |\n| 4 - 20 | $200 | $50 purchase |\n| 21 - 30 | $50 | $150 payment |\nwhat is the finance charge, on the average daily balance, for this card over this 1 month period?\nfinance charge = $?\nround to the nearest cent.

Answer

Explanation:

Step1: Calculate daily balance for each period

Days 1-3: (3 \times 150 = 450)
Days 4-20: (17 \times 200 = 3400) (20-4+1=17 days)
Days 21-30: (10 \times 50 = 500) (30-21+1=10 days)

Step2: Compute total daily balance

(450 + 3400 + 500 = 4350)

Step3: Find average daily balance

(\text{Average Daily Balance} = \frac{4350}{30} = 145)

Step4: Calculate daily interest rate

(\text{Daily Rate} = \frac{0.18}{365} \approx 0.00049315)

Step5: Compute finance charge

(\text{Finance Charge} = 145 \times 0.00049315 \times 30 \approx 2.17)

Answer:

$2.17