Monty currently has a Visa card from his bank with the following terms: 18% on purchases, 24%
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Question:
Build Monty’s credit card account and balance sheet.
1.What will be Monty's minimum payment due?
2. What is the current APY on this credit card?
3. What is the APY on Monty's default or penalty rate?
4. If Monty buys a new television for $800 this month and sends in a credit card payment of $1,200 when he gets his statement, how much interest will he pay on the television for the month?
5. Using the Adjusted Balance Method: If Monty sends in a payment for $1,000, how much will the finance charge be on his remaining balance? (Use the $6,000 balance for your calculations).
6. It is now three months later and Monty has missed two payments in a row and he is now paying the default or penalty rate on his balance. How much interest per month will Monty be accruing on his unpaid balance?
7. What advice would you give to Monty concerning his use of credit cards?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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