hannah has a credit card with an apr of 11.90% and a billing cycle of 30 days. the following table shows…

hannah has a credit card with an apr of 11.90% and a billing cycle of 30 days. the following table shows hannahs transactions in the month of april.\n| date | amount ($) | transaction |\n| ---- | ---- | ---- |\n| 4/1 | 322.95 | beginning balance |\n| 4/10 | 19.87 | purchase |\n| 4/14 | 50.00 | payment |\n| 4/19 | 71.21 | purchase |\nif hannahs credit card company calculates finance charges using the daily balance method, what will her april finance charge be?\na. $2.71\nb. $3.20\nc. $3.30\nd. $3.61

hannah has a credit card with an apr of 11.90% and a billing cycle of 30 days. the following table shows hannahs transactions in the month of april.\n| date | amount ($) | transaction |\n| ---- | ---- | ---- |\n| 4/1 | 322.95 | beginning balance |\n| 4/10 | 19.87 | purchase |\n| 4/14 | 50.00 | payment |\n| 4/19 | 71.21 | purchase |\nif hannahs credit card company calculates finance charges using the daily balance method, what will her april finance charge be?\na. $2.71\nb. $3.20\nc. $3.30\nd. $3.61

Answer

Explanation:

Step1: Calculate daily balances for each period

From 4/1 - 4/9 (9 days): Balance = $322.95$, Total balance - days = $322.95\times9=2906.55$ From 4/10 - 4/13 (4 days): Balance = $322.95 + 19.87=342.82$, Total balance - days = $342.82\times4 = 1371.28$ From 4/14 - 4/18 (5 days): Balance = $342.82-50 = 292.82$, Total balance - days = $292.82\times5=1464.1$ From 4/19 - 4/30 (12 days): Balance = $292.82+71.21 = 364.03$, Total balance - days = $364.03\times12 = 4368.36$

Step2: Calculate the sum of balance - days

Sum of balance - days = $2906.55+1371.28 + 1464.1+4368.36=10110.29$

Step3: Calculate the daily - periodic rate

APR = 11.90% = 0.119, Daily - periodic rate = $\frac{0.119}{365}\approx0.000326027$

Step4: Calculate the finance charge

Finance charge = Daily - periodic rate×Sum of balance - days Finance charge = $0.000326027\times10110.29\approx3.30$

Answer:

c. $3.30$