Question

Michael has an average daily balance on his credit card of $327.50. His credit card charges 11.99% annual interest. What will his monthly finance charge be?

Answer 1

First, we need to calculate Michael's daily interest rate:

0.1199 / 365 = 0.0003282

Then, we can calculate his daily finance charge:

327.50 x 0.0003282 = 0.1075

To find his monthly finance charge, we multiply his daily finance charge by the number of days in a month:

0.1075 x 30 = 3.225

So Michael's monthly finance charge will be $3.23 (rounded to the nearest cent).