Use the information in the box below to complete items 8-13. s a previous balanc

Question

Use the information in the box below to complete items 8-13. s a previous balance of $320.00. On 23. Boone purchases a gift Boone's credit card billing cycle begins on August 17. He has a previous balance of August 19, Boone 23, Boone pur for his sister, Shannon, for $84.50 using the card. On August 30, Boone uses his credit buy a $1,240.50 plane ticket to Sydney. Australia. On September 8, Boone pays to the credit card company. The billing cycle ends on September 16. Boone's monthly pe pays the credit card company $160, and on August uses his credit card to another $100.00 iodic rate is 3.5%. 8. Previous-Balance Method: Finance Charge = 9. Unpaid-Balance (Adjusted-Balance) Method: Unpaid Balance- Finance Charge- 10. Average-Daily-Balance Method WITH New Purchases: STEP 1: How many days are in the billing cycle? Number of Days- STEP 2: Fill in the list below with each end of day balance. Aug 25 Sept 10 Sept 11 g25Sept 3Sept 4Sept Sept 2 Aug 17 Aug 25 Aug 18 Aug 26 Aug 19_ Aug 20 -Se Aug 20 - --. Aug 27 __ _ Sept 3- Aug 21_ Sept 3- Sept 12 Sept 4 Sept 5 Aug 28 Aug 29- Aug 29Sept6 Sept 7 Aug 30-_ -Sept 7 Aug 31 Sept 8 Sept 1 - Sept 8 Sept 15_ Sept 16 Aug 22 22 . Aug 31- Aug 23 Sept 9- -Sept 9 STEP 3: Sum of Daily Balances - STEP4: Average Daily Balance- STEP 5: Finance Charge = 2328 (ow

Explanation / Answer

Ans 8. Previous Balance Method Beginning Balance $     320.00 Periodic rate/month 3.50% Finance Charge= Beginning Balance *Monthly peridic rate Finance Charge= Beginning Balance *Monthly peridic rate $        11.20 Finance Charge =$11.20 Ans 9. Adjusted balance method Beginning Balance $     320.00 Paid during month $     260.00 Adjusted Balance= $        60.00 Periodic rate/month 3.50% Finance charge= Adjusted balance8periodic rate =60*0.035 = $          2.10 Finance charge = $2.10 Ans 10 Average daily balance method 17-Aug Opening Purchase Payment Closing 18-Aug 320 320 19-Aug 320 160 160 20-Aug 160 160 21-Aug 160 160 22-Aug 160 160 23-Aug 160 84.5 244.5 24-Aug 244.5 244.5 25-Aug 244.5 244.5 26-Aug 244.5 244.5 27-Aug 244.5 244.5 28-Aug 244.5 244.5 29-Aug 244.5 244.5 30-Aug 244.5 1240.5 1485 31-Aug 1485 1485 1-Sep 1485 1485 2-Sep 1485 1485 3-Sep 1485 1485 4-Sep 1485 1485 5-Sep 1485 1485 6-Sep 1485 1485 7-Sep 1485 1485 8-Sep 1485 100 1385 9-Sep 1385 1385 10-Sep 1385 1385 11-Sep 1385 1385 12-Sep 1385 1385 13-Sep 1385 1385 14-Sep 1385 1385 15-Sep 1385 1385 16-Sep 1385 1385                                   27,436.50      1,325.00       260.00    28,501.50 Sum of daily balances =    28,501.50 No of days in Billing cycle 31 Average daily balance =          919.40 Finance Charge = Average daily balance*periodic rate = $        32.18

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