Question

Randy Ice starts the month with a balance on his credit card of $1000. On the 10th day of the month, he purchases $200 in clothes with his credit card. On the 15th day of the month he makes a payment on his credit card of $500. The average daily balance for the month including the new purchase is $883. The average daily balance for the month excluding the new purchase is $750. The bank charges 1.5 percent per month and uses the average daily balance excluding new purchases method. What would Randy's finance charges be for the month

Answer 1

Answer: $11.25

Explanation:

From the above question, The bank charges 1.5 percent per month and uses the average daily balance excluding new purchases method.

The average daily balance for the month excluding the new purchase is $750.

Therefore, the finance charge =

$750 x 1.5%

= $11.25