You owe $561.54 on your credit card. Your average daily balance is $220.77, the billing cycle is 32 days, and the interest rate on the credit card is 19%. What is your interest charge?
A- $4.89
B- $4.02
C- $3.68
D- $3.86
D- $3.86
To calculate the interest charge, you need to first find the average daily balance for the billing cycle.
$220.77 x 32 = $7064.64 (total charges for the billing cycle)
$7064.64 / 32 = $220.77 (average daily balance)
Next, you can use the following formula to calculate the interest charge:
average daily balance x daily interest rate x number of days in billing cycle
$220.77 x 0.19/365 x 32 = $3.86
Therefore, the interest charge on the credit card is $3.86.