You owe $644.90 on your credit card. Your average daily balance is $376.11, the billing cycle is 38 days, and the interest rate on the credit card is 19%. What is your interest charge?
A- $7.84
B- $4.74
C- $7.44
D- 6.95
To calculate the interest charge, we need to use the following formula:
Interest charge = (average daily balance x billing cycle x daily periodic rate)
First, we need to calculate the daily periodic rate, which is the annual interest rate divided by 365:
Daily periodic rate = 19% / 365 = 0.00052
Next, we can plug in our values to the formula:
Interest charge = (376.11 x 38 x 0.00052) = $7.44
Therefore, the answer is C) $7.44.