Calculate the average balance and finance charge
To calculate the monthly finance charge, use the formula: Finance Charge = Average Daily Balance × Daily Periodic Rate × Number of Days in the Cycle. Plugging in the values, we get: Finance Charge = 20 × 0.0005 × 30 = 0.30. Therefore, the monthly finance charge is $0.30.
To calculate the monthly finance charge, use the formula: Finance Charge = Average Daily Balance × Daily Periodic Rate × Number of Days in Cycle. Here, it would be: Finance Charge = 30 × 0.07 × 30. This equals a finance charge of 63. Therefore, the monthly finance charge is $63.
To calculate the finance charge, multiply the credit card balance by the monthly interest rate. For a balance of $3,299.19 at a monthly rate of 1.2% (0.012), the finance charge is: Finance Charge = $3,299.19 × 0.012 = $39.59. Therefore, the finance charge for that month is approximately $39.59.
To calculate the monthly finance charge, you can use the formula: Finance Charge = Average Daily Balance × Daily Periodic Rate × Number of Days in Cycle. Here, the average daily balance is $15, the daily periodic rate is 0.06 (which is 0.0006 when expressed as a decimal), and the number of days is 30. So, the finance charge would be: Finance Charge = $15 × 0.0006 × 30 = $0.27. Thus, the monthly finance charge is $0.27.
The method of calculating finance charges that typically results in the lowest finance charge is the Average Daily Balance method. This approach considers the daily balance of the account over the billing cycle, allowing for fluctuations in the balance to be averaged out, which can lead to a lower overall finance charge compared to methods like the Previous Balance method or the Adjusted Balance method. By minimizing the balance used in calculations, the Average Daily Balance method can reduce the finance charge incurred.
multi the unpaid balance by the monthly interest rate
$39.59
A finance charge is interest charged by a lender on the unpaid balance of a loan.
A finance charge is interest charged by a lender on the unpaid balance of a loan.
Paying the bill as early in the payment period as possible will make the average daily balance lower and therefore minimize the finance charges.
Calculate the finance charge on a credit card balance of 3,299.19 at a monthly rate of 1.2%.
Calculate the finance charge on a credit card balance of 3,299.19 at a monthly rate of 1.2%.