Final answer:
The question involves calculating credit card interest from the average daily balance and the APR. It's contextualized in the broader credit card market, where the average interest rate is 15% and consumers pay high interest fees.
Step-by-step explanation:
The student is asking how to calculate credit card interest based on the average daily balance and the annual percentage rate (APR). Given an average daily balance of $3,200 for the month of April and an unpaid balance of $2,600 at the end of the month, with an APR of 14.4%, they are looking to understand the cost of borrowing on a credit card.In the broader context, this question ties into the market for borrowing money with credit cards, where credit card debt carries an average annual interest rate of about 15% per year.
Credit card users pay significant amounts in interest, especially when they only make the minimum payments on their outstanding balances. With billions of dollars in credit card debt across the United States, understanding how interest accrues is crucial for financial literacy andThe average daily balance of a credit card for the month of April was $3200 and the unpaid balance at the end of the month was $2600. The annual percentage rate (APR) is 14.4%To calculate the monthly interest, we can use the formula: Monthly interest = (Average daily balance * APR) / (365)Plugging in the given values:Monthly interest = (3200 * 0.144) / 365Monthly interest ≈ $12.71Therefore, the monthly interest on the unpaid balance at the end of April is approximately $12.71. management.