liffo 6. Joe Suskind's previous month's balance on his revolving credit account was $1216.88. The account had the following activity for May: May 10, purchases, $270; May 15, a credit of $86.50; May 19, payment of $300; and May 25, purchases $122.25. The finance charge is Hong calculated on the average daily balance at a 15% annual percentage rate. Main (a) How much is the finance charge for May? Answer: schoolce (b) What is Joe's new balance? Answer:FORMULAS Compound Amount (Future Value) A= P( 1+1)" Present Value - Investments at Compound Interest PV= A (1+i)" Annual Percentage Yield (APY) APY = (1+1)"-1 Future value-Ordinary annuity FV = Pmt x (1+1)"-1 i Future value-Annuity due FV = Pmt x 1+1) x(1+1) i Present value-Ordinary annuity PV = Pmt x 1-(1+1)7 Present value-Annuity due PV = Pmt x 1-(1+1) x (1+i) Sinking fund payment FV X - i (1+1)"-1 Amortization payment PV X- i 1- (1+i)