Suppose you have a credit card with an 20.4% annual interest rate, and the statement balance for the month is $8,600. Suppose also that you have already computed the average daily balance to be $11,868.
Find the interest charges for the month. Round to the nearest cent.
$
Find the amount due for your next bill. Round to the nearest cent.
$
To find the interest charges for the month, we can use the following formula:
Interest Charges = Average Daily Balance * (Annual Interest Rate / 365) * Number of Days in the Month
First, let's find the number of days in the month. Suppose the month has 30 days.
Interest Charges = $11,868 * (0.204 / 365) * 30
Interest Charges = $195.32
Therefore, the interest charges for the month are $195.32.
To find the amount due for your next bill, we need to add the interest charges to the statement balance.
Amount Due = Statement Balance + Interest Charges
Amount Due = $8,600 + $195.32
Amount Due = $8,795.32
Therefore, the amount due for your next bill is $8,795.32.