02 02 ezto.mheducation.com/hm.tp Amacon.com-Onlins Priceline.com 2. 20.00 points

Question

02 02 ezto.mheducation.com/hm.tp Amacon.com-Onlins Priceline.com 2. 20.00 points value If you are trying to build credit by using a credit card, each time you make a purchase with the credit card deduct that amount from your checking account. That way, when your credit card bill is due, you will have enough to pay the credit card off in full Kathy Lehner is going to start doing this. She plans on paying her credit card bil in full this month How much does she owe with a 9% APR and the following transactions? Round your answer to the nearest cent.) 31-day billing $ 1.156 10/1 Previous balance 10/3 Credi 10/12 Charge: King Soopers 10/15 Payment 10/25 Charge: Delta 10/30 Charge Holiday Fun s 87 cr 140 230 cr 313 53 Amount owed References eBook & Resources Worksheet ype here to search

Explanation / Answer

Calculation of credit card balances on each transaction Date Balance 01-Oct Beginning balance $1,156.00 03-Oct Credit $1,069.00 12-Oct Charge - King Scoopers $1,209.00 15-Oct Payment $979.00 25-Oct Charge - Delta $1,292.00 30-Oct Charge - Holiday Fun $1,345.00 Calculation of monthly interest charge using average daily balance method Date No.of days Credit card balance Multiplication From To 01-Oct 02-Oct 2 $1,156.00 $2,312.00 03-Oct 11-Oct 9 $1,069.00 $9,621.00 12-Oct 14-Oct 3 $1,209.00 $3,627.00 15-Oct 24-Oct 10 $979.00 $9,790.00 25-Oct 29-Oct 5 $1,292.00 $6,460.00 30-Oct 31-Oct 2 $1,345.00 $2,690.00 Total $34,500.00 / No.of days in billing cycle 31 Average daily balance $1,112.90 Credit card monthly charge = [average daily balance * APR * days in billing cycle] / 365 Credit card monthly charge = [1112.90 * 9% * 31] / 365 Credit card monthly charge = $8.51 Amount owed = $1345 + $8.51 = $1,353.51

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