Question

Jennifer did not pay her credit card bill in full in September. Her October
bill showed a finance charge, and she wants to see whether it is correct or
not. The average daily balance is $970.50, and the APR is 15,6%. Find
the finance charge for her October statement.

Answer 1

Answer: $12.6165

Step-by-step explanation:

Finance charge = Average daily balance × monthly periodic rate.

where,

Monthly periodic rate = APR / 12 months

Monthly periodic rate = 15.6% / 12

= 0.156 / 12

= 0.013

Finance charge = $970.50 × 0.013

= $12.6165