Question

What is the monthly finance charge if the average daily balance is $15, the daily periodic rate is 0.06%, and the number of days in the cycle is 30?

Answer 1

Given

 The average daily balance is $15

The  daily periodic rate = 0.06%

The number of days in the cycle is 30

Find out the monthly finance charge.

To proof  

Let us assume that the monthly finance charge = x

As given in the question

The average daily balance = $15

daily periodic rate = 0.06%,

First convert 0.06% in decimal form

$=\frac{0.06}{100}$

= 0.0006

Daily finance charge =  0.0006 × 15

                                   =  0.009

number of days in the cycle is 30

now

monthly finance charge

Than the equation becomes

x = 15 × 0.0006 × 30

x = 0.009× 30

x  = $0.27

Thus the monthly finance charge is $0.27

Hence proved