A credit card statement for July showed these transactions: July 1 Previous balance July 6 Purchase...

  

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A credit card statement for July showed these transactions: July 1 Previous balance July 6 Purchase July 14 July 20 $ 2000.00 $ 500.00 Payment $ 100.00 Purchase $ 80.00 Which interest method: unpaid balance at 1.25% per month or average daily balance at 1.25% per month will result in the lower finance charge for July? By how much? On another credit card you have a balance of $3000.00 with an interest rate of 1% per month on the unpaid balance. The minimum payment each month is the interest for the month PLUS 2% of the unpaid balance. So every month if you make the minimum payment you cover the 1% interest and the principal balance decreases by 2%. You decide to make no further purchases on this credit card and make the minimum payment each month for four months. How much will you have paid down the principal balance at the end of four months? A credit card statement for July showed these transactions: July 1 Previous balance July 6 Purchase July 14 July 20 $ 2000.00 $ 500.00 Payment $ 100.00 Purchase $ 80.00 Which interest method: unpaid balance at 1.25% per month or average daily balance at 1.25% per month will result in the lower finance charge for July? By how much? On another credit card you have a balance of $3000.00 with an interest rate of 1% per month on the unpaid balance. The minimum payment each month is the interest for the month PLUS 2% of the unpaid balance. So every month if you make the minimum payment you cover the 1% interest and the principal balance decreases by 2%. You decide to make no further purchases on this credit card and make the minimum payment each month for four months. How much will you have paid down the principal balance at the end of four months?

Answer rating: 100% (QA)

To determine which interest method will result in the lower finance charge for July lets calculate the finance charges using both the unpaid balance m... View the full answer