Solve the problem.
-On the November 6 billing date, Terry had a balance due of $455.76 on his credit card. The Transactions during the following month were: $$\begin{array} { l l r }
\text { November } 8 & \text { Charge: tools } & \$ 51.46 \
\text { November } 9 & \text { Payment } & \$ 68.83 \
\text { November } 13 & \text { Charge: car repair } & \$ 232.85 \
\text { December } 3 & \text { Charge: internet charge } & \$ 30.26
\end{array}$$
The interest rate on the card is 1.6% per month. Using the average daily balance method, find the Balance due on December 6 (November has 30 days).
A) $711.47
B) $465.73
C) $396.90
D) $711.51

Question

Solve the problem.
-On the November 6 billing date, Terry had a balance due of $455.76 on his credit card. The Transactions during the following month were: $$\begin{array} { l l r } 
\text { November } 8 & \text { Charge: tools } & \$ 51.46 \
\text { November } 9 & \text { Payment } & \$ 68.83 \
\text { November } 13 & \text { Charge: car repair } & \$ 232.85 \
\text { December } 3 & \text { Charge: internet charge } & \$ 30.26
\end{array}$$
The interest rate on the card is 1.6% per month. Using the average daily balance method, find the Balance due on December 6 (November has 30 days).
A) $711.47
B) $465.73
C) $396.90
D) $711.51

Quizplus · Accepted Answer

The average daily balance is calculated by adding the balance due each day and dividing by the number of days in the billing cycle. The balance due on each day is calculated by adding the previous day's balance to the charges made that day and subtracting any payments made that day.For the November billing cycle, the average daily balance is:```(455.76 + 51.46 - 68.83 + 232.85 + 30.26) / 30 = 222.54```The interest charged for the November billing cycle is:```222.54 * 0.016 = 3.56```The balance due on December 6 is:```455.76 + 51.46 - 68.83 + 232.85 + 30.26 + 3.56 = 711.47```Therefore, the correct answer is A) $711.47.

Solve the Problem The Interest Rate on the Card Is 1