Your bankcard has an APR of 18% and there is a 2% fee for cash advances.The bank starts charging interest on cash advances immediately.You get a cash advance of $600 on the first day of the month.You get your credit card bill at the end of the month.What is the total finance charge you will pay on this cash advance for the month? Assume each month has 30 days
A)$12.
B)$9.
C)$21.
D)$0.
E)$2.

Question

Quizplus · Accepted Answer

The total finance charge for the cash advance includes the interest charged and the cash advance fee.

Cash advance fee = 2% of $600 = $12

Interest charged = (18%/365) * 30 days * $600 = $27.12

Total finance charge = $12 + $27.12 = $39.12

Therefore, the total finance charge you will pay on this cash advance for the month is $39.12, which is closest to option C, $21.

Your Bankcard Has an APR of 18% and There Is