Answer-
The monthly finance charge will be $0.24 or 24 cents.
Solution-
We know that,
[tex]\text{Finance charge}=\dfrac{\text{Balance}\cdot \text{APR}\cdot \text{Number of days in billing cycle}}{365}[/tex]
As here, daily periodic rate is 0.04%, i.e
[tex]\dfrac{\text{APR}}{365}=0.04\%=0.0004[/tex]
Putting the values in the formula,
[tex]\text{Finance charge}=20\times 30\times 0.0004=\$0.24[/tex]
Answer:
The monthly finance charge is $0.24.
Step-by-step explanation:
Given : The average daily balance is $20, the daily periodic rate is 0.04%, and the number of days in the cycle is 30.
To find : What is the monthly finance charge?
Solution :
Let the finance charge be x,
The average daily balance is $20,
The daily periodic rate is 0.04%=0.0004,
Number of days = 30
We know that,
[tex]\text{Finance charge}=\text{Balance}\times\text{APR}\times\text{Number of days in billing cycle}[/tex]
[tex]x=20\times 30\times 0.0004[/tex]
[tex]x=\$0.24[/tex]
Therefore, The monthly finance charge is $0.24.
