Answer:
Monthly interest rate of daves is 1.7% and finance charge for a month = 2.09848 unit of currency.
Solution:
Need to calculate monthly interest rate and finance charge for the month for Dave’s credit card.
Given that
Average daily balance for Dave’s last credit card statement = 123.44
he had to pay a finance charge with APR of 20.4%
A.P.R is annual percent rate that is for 12 months
So for 1 month, interest = 20.4/12 = 1.7%
Average daily balance of Dave on which finance charges got applied = 123.44
Finance charges for 1 month = 1.7% of 123.44
[tex]= \frac{1.7}{100} \times 123.44 = 2.09848.[/tex]
Hence monthly interest rate is 1.7% and finance charge for a month = 2.09848 unit of currency.
