Question

Skipper has a credit card account that charges 19% APR using 31-day billing. On the first day of the billing periods. Skip advised marine grade wrote for 933 onto the credit card. No other purchases are made. Skipper pays off the purchase on day 31 at the end of the billing. What is Skipper's finance charge around the answer to the nearest penny?.

Answer 1

Skipper's finance charge on the credit card, with a 19% APR over a 31-day period and a $933 charge, is calculated daily and results in a total finance charge of $15.05 when rounded to the nearest penny.

Step-by-step explanation:

To calculate Skipper's finance charge on the credit card, we need to use the Annual Percentage Rate (APR) and the amount charged. Since the interest is charged on a daily basis, we'll first find the daily periodic rate by dividing the APR by the number of days in the year. Then, we'll calculate the interest accrued over the 31-day billing period.

The daily periodic rate is 19% ÷ 365 = 0.05205%. Multiply this rate by the balance ($933) to get the daily interest charge, then multiply by the billing period length (31 days) to find the total finance charge.

The calculation is as follows:

• Daily periodic rate = 19% / 365 = 0.05205%
• Daily interest charge = $933 * 0.05205% = $0.485365
• Total finance charge = $0.485365 * 31 days = $15.046315

Therefore, the finance charge rounded to the nearest penny is $15.05.