select the correct answer.\nwhat is the monthly finance charge if the average daily balance is $30, the…

select the correct answer.\nwhat is the monthly finance charge if the average daily balance is $30, the daily periodic rate is 0.07%, and the number of days in the cycle is 30?\na. 21¢\nb. 63¢\nc. 90¢

select the correct answer.\nwhat is the monthly finance charge if the average daily balance is $30, the daily periodic rate is 0.07%, and the number of days in the cycle is 30?\na. 21¢\nb. 63¢\nc. 90¢

Answer

Explanation:

Step1: Convert daily rate to decimal

The daily periodic rate of 0.07% is $0.07\div100 = 0.0007$ in decimal form.

Step2: Calculate monthly finance - charge

The formula for the finance - charge is $Finance\ Charge=Average\ Daily\ Balance\times Daily\ Periodic\ Rate\times Number\ of\ Days$. Substitute the given values: $30\times0.0007\times30$. First, $30\times0.0007 = 0.021$, then $0.021\times30=0.63$. Since the result is in dollars and we want the answer in cents, $0.63\times100 = 63$ cents.

Answer:

B. 63¢