Question

Burt has an outstanding balance of $235.86 on his credit cardaccount. What is the finance charge for the month if it iscalculated at 1.75%per month?a. $35.40b. $239.22c. $42.42d. $4.13

Answer 1

D. $4.13

Step-by-step explanation:

Given;

Outstanding balance = $235.86

Monthly interest rate in decimal = 1.75% = 1.75/100 = 0.0175

We'll use the below formula to determine the finance charge;

`\begin{gathered} \text{ Finance Charge }=\text{Outstanding balance x Monthly interest rate} \\ \text{ Finance Charge = }235.86*0.0175=\text{ \$4.13} \\ \end{gathered}`