Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Question
Calculate the finance charge for a credit card that has the given average daily balance and interest rate. (Round your answer to the nearest cent.)
Average daily balance: $116.44; monthly interest rate: 1.15%
Expert Solution
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Step 1
The finance charges are the charges that credit card company collects from customers on the amount due for using a credit card. The finance charges increase if the amount due for using credit cards is higher, which means the finance charges can be lowered by paying the outstanding amount every month.
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