Question

What is the monthly finance charge if the average daily balance is $15, the daily periodic rate is 0.06%, and the number of days in the cycle is 30?

a) $0.81
b) $0.09
c) $0.54
d) $0.45

Answer 1

The monthly finance charge is $0.09.

Step-by-step explanation:

The monthly finance charge can be calculated by multiplying the average daily balance by the daily periodic rate and the number of days in the cycle.

Given that the average daily balance is $15, the daily periodic rate is 0.06% (0.0006), and the number of days in the cycle is 30, we can calculate the finance charge as follows:

Finance charge = $15 * 0.0006 * 30 = $0.27

Therefore, the correct option is b) $0.09.