Question

At the beginning of December, Jane's unpaid balance on her credit card from October was $400. At the beginning of the day on December 6, Jane paid off $100 of her balance, and at the beginning of the day on December 14, Jane paid off the remaining $300 of her balance. If she is charged a finance fee of 1.8% each day on her end-of-day balance, what is the fee she is charged for her October balance?

Answer 1

Jane is charged a finance fee of $43.20 for her October balance.

October Balance: $400

December 6: Jane paid off $100, leaving a balance of $300.

December 14: Jane paid off the remaining $300.

Now, calculate the daily finance fee:

Daily Interest Rate: 1.8% or 0.018

Daily Fee = Balance * Daily Interest Rate

Daily Fee = $300 * 0.018 = $5.40

For 8 days (from December 6 to December 14):

Total Fee = Daily Fee * Number of Days

Total Fee = $5.40 * 8 = $43.20

Therefore, Jane is charged a finance fee of $43.20 for her October balance.