Question
On September 5. the billing date, Verna had a balance due of $560.56 on her credit card. Assume that the interest rate is 1.1% per
On September 5. the billing date, Verna had a balance due of $560.56 on her credit card. Assume that the interest rate is 1.1% per month. Suppose that Verna's bank uses the average daily balance method. Answer parts (a) through (d).
(a) Determine Verna's average daily balance for the billing period from September 5 to October 5.
(b) Determine the finance charge to be paid on October 5.
(c) Determine the balance due on October 5.
(d) Using the previous balance method, the finance charge is $6.17 and the balance due is $888.45. How do the results obtained using the average daily balance method compare to those obtained using the previous balance method?
| Sept. 7 | Payment | $285.00 |
| Sept 21 | Charge: Airline Ticket | $330.00 |
| Sept. 24 | Charge: Hotel Bill | $193.13 |
| Oct. 1 | Charge: Clothing | $85.59 |
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Healthcare Finance An Introduction To Accounting And Financial Management
Authors: Louis C. Gapenski
5th Edition
1567934250, 978-1567934250
