The following table shows the expenses and payments on a credit card for 3 months, starting with an initial balance of $700. Use the table as a guide to help you find the balance at the end of the third month, to the nearest dollar. Assume that the APR for the credit card is 30% (billed at a rate of 2.5% per month), and that the interest for a given month is based on the balance for the previous month. Month 0 1 2 3 Payment - $550 $250 $400 Expense's $720 $610 $380 Interest - Balance $700

The following table shows the expenses and payments on a credit card for 3 months, starting with an initial balance of $700. Use the table as a guide to help you find the balance at the end of the third month, to the nearest dollar. Assume that the APR for the credit card is 30% (billed at a rate of 2.5% per month), and that the interest for a given month is based on the balance for the previous month. Month 0 1 2 3 Payment - $550 $250 $400 Expense's $720 $610 $380 Interest - Balance $700

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Assume you have a balance of $1200 on a credit card with an APR of 24%, or 2% per month. You start making monthly payments of $200, but at the same time you charge an additional $70 per month to the credit card. Assume that interest for a given month is based on the balance for the previous month. The following table shows how you can calculate your monthly balance. Complete and extend the table to show the balance at the end of each month until the debt is paid off. How long does it take to pay off the credit card debt? Fill out the table row by row, and continue until the last full payment. (Round to the nearest cent as needed.) Month Payment Expenses Interest New Balance $1200 1 $200 $70 0.02 x $1200 = $24.00 $1200 - $200 + $70 + $24.00 = $1094.00 $200 $70
Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.9%. The itemized billing for the month of August is shown below The average daily balance has already been computed and is $2739.52. (a) Find the interest due for this month. $ (b) Find the total balance owed on the last day of the billing period. $ (c) This credit card requires a $15 minimum payment or 1/24 of the amount due, whichever is higher. What is the minimum monthly payment due for this month? $
Assume you have a balance of $1000 on a credit card with an APR of 24%, or 2% per month. You start making monthly payments of $200, but at the same time you charge an addicional $90 per month to the credit card. Assume that interest for a given month is based on the balance for the previous month. The following table shows how you can calculate your monthly balance. Complete and extend the table to show the balance at the end of each month until the debt is paid off. How long does it take to pay off the credit card debt? Fill out the table row by row, and continue until the last full payment (Round to the nearest cent as needed) Month Payment 0 1 $2 $200 $200 $200 $200 Continue until the last full payment 3 4 $200 Expenses $90 $90 $90 590 Interest 0.02 $1000-$20.00 $90 Therefore, ain)th partial payment will pay off the loan, which means the loan will paid off in months New Balance $1000 $1000-$200-500-$20.00-$910.00
Find the average daily balance for the credit card with the following transactions. Assume one month between billing dates using the proper number of days in the month. Then find the finance charge if interest is 1.5% per month on the average dally balance. Finally, find the new balance. Previous Balance: $556.32 Billing date: July 9 July 15, Return, $114.45 July 17, Purchase, $98.12 July 25, Purchase, $76.12 August 7, Payment, $110 What is the average daily balance? What is the finance charge? What is the new balance?
Use the average daily balance method to compute the finance charge on the credit card account for the month of August (31 days). The starting balance from the previous month is $290. The transactions on the account for the month are given in the table to the right. Assume an annual interest rate of 21% on the account and that the billing date is August 1st. (see image for table.) The finance charge for the month of August is $___
Use the average daily balance method to compute the finance charge on the credit card account for the month of August (31 days). The starting balance from the previous month is $320. The transactions on the account for the month are given in the table to the right. Assume an annual interest rate of 25% on the account and that the billing date is August 1st.
You have a credit card that charges an interest rate of 20.55% compounded monthly. The table below shows your activity for the month of April. (April has 30 days, which is the number of days in the billing cycle.) The Average Daily Balance is 561.95. Date April 1 April 6 April 9 Payment April 13 Purchase April 18 Purchase April 21 Purchase April 30 End of Billing Cycle Activity Beginning Balance, Start of Billing Cycle Purchase Calculate the interest for the month of April? Calculate the new balance at the end of April. $ 600.00 36.80 -200.00 92.25 16.00 47.00
Calculate the average daily balance (in $) for October for a revolving credit account with a previous month's balance of $110 and the following activity. (Round your answer to the nearest cent.)
Use the average daily balance method to compute the finance charge on the credit card account for the month of August (31 days). The starting balance from the previous month is $260. The transactions on the account for the month are given in the table to the right. Assume an annual interest rate of 24% on the account and that the billing date is August 1st. The finance charge for the month of August is $ (Round to the nearest cent as needed.) Date August 7 August 14 August 19 August 30 Transaction Made payment of $79 Charged $125 for hiking boots Charged $24 for gasoline Charged $27 for restaurant meal
Assume that you start with a balance of $3900 on your credit card. During the first month you charge $400 and during the second month you charge $650. Assume that your credit card charges a 29% APR and that each month you make only the minimum payment of 2.5% of the balance . Complete the following table. Round to nearest cent Table Month 1 Previous balance- Finance charge - Purchase- Payments- New balance Month 2 Previous balance- Finance charge - Purchase- Payments- New balance
You have a credit card with an APR (Annual Percentage Rate) of 12%. You begin with a balance of $200, in response to which you make a payment of $75. The first month you make charges amounting to $50. You make a payment of $75 to reduce the new balance, and the second month you charge $60. Previous balances, payments and purchases for the months 1 and 2 are given in the table below: Month Previous Balance Payment Purchases Finance Charge New Balance 1 $200 $75 $50 a:$ b:$ 2 $ $75 $60 c:$ d:$
Suppose your MasterCard calculates interest using the average daily balance method, and the monthly interest rate is 1.6%. The itemized billing for the month of August is shown below. Detail Unpaid balance Charge Charge Charge Payment received Last day of billing period Payment due date Date August 1 August 9 August 10 August 18 August 25 August 31 September 7 (a) Find the average daily balance. $ (b) Find the interest due for this month. $ Amount 1085 125 1130 140 995 (c) Find the total balance owed on the last day of the billing period. $ (d) This credit card requires a $15 minimum payment or 1/24 of the amount due, whichever is higher. What is the minimum monthly payment due for this month? $

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