Question

The ending balance on your credit card statement last month was $1200 and your average daily balance was $900. the apr on the card is 18 percent. what was the finance charge for the month

Answer 1

The finance charge for a credit card with an average daily balance of $900 and an APR of 18% for a month is approximately $13.37, calculated using the average daily balance method.

Step-by-step explanation:

To calculate the finance charge on a credit card statement, you can use the formula for the periodic interest rate: Finance Charge = Average Daily Balance × Annual Percentage Rate (APR) × Days in Billing Cycle ÷ 365.

Given that the average daily balance was $900, the APR is 18%, and assuming a typical billing cycle of 30 days, the calculation for the finance charge for one month is as follows:

Finance Charge = $900 × 18% × 30 ÷ 365 = $900 × 0.18 × 30 ÷ 365 = $13.37.

Thus, the finance charge for the month would be approximately $13.37.