Question

Amelia has a credit card with an APR of _____. She never pays her balance in full, so she always pays a finance charge. The next billing cycle starts on _____. The billing period is _____ days. Her balance is _____. She is only going to use the credit card once this month, to make a $5,000 down payment on a new _____. What is the finance charge for this billing period based on the average daily balance from part a?

Answer 1

The APR for Amelia's credit card is missing. Therefore, the finance charge for this billing period cannot be calculated without knowing the APR.

Step-by-step explanation:

To calculate the finance charge for the billing period, we require the APR (annual percentage rate) of Amelia's credit card. This crucial information is missing in the question. The finance charge is computed based on the APR, the average daily balance, and the number of days in the billing cycle.

The formula to calculate the finance charge is: Finance Charge = Average Daily Balance × APR × (Number of days in the billing cycle ÷ Days in a year).

Without the APR provided, it's impossible to compute the finance charge accurately. The APR determines the interest rate charged on the outstanding balance. With the missing APR, any attempt to calculate the finance charge would be speculative and inaccurate.

To arrive at the finance charge accurately, it's essential to have the APR mentioned in the question. Without this information, a precise calculation cannot be made.