Question

4. Your credit card charges 20% interest and the billing cycle starts on the 1st.   The table below shows the beginning balance, charges and payments to the credit card. Your card uses the average daily balance method.   Fill out the chart and then determine the service charge for the month of July.

			Days on which the balance is valis
Balance from end of June		200
Charge July 4	300
Payment July 16	400
Charge July 20	100

Answer 1

Your credit card charges 20% interest and the billing cycle start on the 1st. The table below show the beginning balance, charges and payments to the credit card. Your card uses the average daily balance method. Fill out the chart and then determinet the service charge for the month of July.

=> Solution :-

Given data -

* Unpaid balance of month July = 200

* Interest rate = 20%

* Total purchase of July month = 400

* Payment of July month = 400

* Interest of month = 200 × 0.2 = 40

= Current unpaid balance =

( 200 + 40 + 400 - 400 ) = 240

=> The service charge of July month = 240  

* The chart is given below -