Question

Eleanor had an average daily balance of $250.82 in her chargeaccount. She paid 1.7% interest on that amount. Compute her financecharge.a. $254.58b. $.13c. $37.63d. $4.26

Answer 1

For an daily balance of P in her charge account and an interest paid at a rate of r, her finance charge is given by the expression:

F = r*P

For r = 1.7% and P = $250.82, we have:

F = 0.017*250.82

F = $4.26

Answer: d