Question

Alexis buys groceries using her credit card her card has an APR of 19.99% and she must pay at least 5% of the balance at the end of each month for carryover balance for groceries is $398.97 what would her finance charge be at the end of the month

Answer 1

The answer is that she would pay $65.56 in finance charges at the end of the month.

Explanation:

Given: APR = 19.99%

Carry Over Balance: $398.97

The APR or Annual Percentage Rate, is calculated daily. You will need to get the daily periodic rate, or DPR, so divide the APR by 365:

19.99% = .1999

.1999 / 365 = .005477 (This is the Approximate DPR, rounded up to .005477)

To get the finance charge, multiply the average daily balance by the DPR and then by 30 days:

398.97 * .005477 * 30 = $65.56 finance charge for this carry over balance, at the end of the month. This assumes that the balance is the average daily balance.

Hope this helps!! Have a great day!