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
1 answer:
Given
The daily average balance is $15.
The daily periodic interest rate = 0.06%.
The cycle consists of 30 days.
Calculate the monthly finance charge.
To justify:
Let’s denote the monthly finance fee as x.
According to the details provided:
The average daily balance = $15.
The daily periodic rate = 0.06%,
First, we convert 0.06% to decimal:
= 0.0006.
Daily finance charge = 0.0006 multiplied by 15.
= 0.009.
The number of days in the cycle totals 30.
Now, calculating the monthly finance charge:
The equation becomes:
x = 15 × 0.0006 × 30.
x = 0.009× 30.
x = $0.27.
Thus, the monthly finance charge amounts to $0.27.
Thus proved.
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