Question

Calculate the monthly finance charge based on the following data: Average daily balance = $40.00 Daily periodic rate = 0.06% (state as a decimal) Days in cycle = 25

Answer 1

Answer: 60 cents

Explanation:

Answer 2

The monthly finance charge would be $0.60.

This is calculated by multiplying the daily balance by the daily rate (as a decimal) and then multiplying by the number of days in the billing cycle.

0.06%=0.06/100 = 0.0006

40(0.0006)(25) = 0.6 or $0.60.