To calculate the interest charged for the month on a credit card with a balance of $1000 and an APR of 28% after making a $400 payment on the 11th day of a 31-day month, we need to first calculate the average daily balance for the month.
The average daily balance is calculated as follows:
(Previous balance × number of days in billing cycle) + (New charges × number of days since posting of new charges) - (Payments and credits × number of days since payment/credit) / Number of days in billing cycle
In this case, the previous balance is $1000, the number of days in the billing cycle is 31, the new charges are 0, the number of days since posting of new charges is 20 (since the payment posted on the 11th day of the month), the payment/credit is $400, and the number of days since payment/credit is 21. Plugging in these values, we get:
($1000 × 31) + (0 × 20) - ($400 × 21) / 31 = $727.10
Therefore, the average daily balance for the month is $727.10.
To calculate the interest charged for the month, we multiply the average daily balance by the daily periodic rate, which is the APR divided by 365 (since there are 365 days in a year):
$727.10 × (0.28 / 365) × 31 = $19.97
Therefore, the interest charged for the month is $19.97.