Credit Card Interest on charge of $1818.30 for audio system

June

New member
Joined
Jul 2, 2018
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25
Hey guys,

I'm about four hours away from my final and on hour 20 of staying awake. I'm planning on taking a quick nap before the final. I've been going through all the questions from previous unit tests and have tried to solve them all again to make sure I fully understand them, however I could use some help on this one. (I apologize for the sudden post of all the questions within the last couple of hours)

I'm confused about the 'IV' policy.

If I were calculating this normally I would firstly calculate the remaining balance and calculate the interest on that amount.
1818.30 - 1400.00 = 418.30
418.30(0.21)(28/365) = 6.73
418 + 6.74 = 424.74

How do I apply the policy note to this question?

Question Please.jpg

Thank you
June
 
The note is very clear.
1. Use the entire balance, not remaining balance.
2. What is 28 in your calculations? The applicable period is from the day of processing (not purchase) to the day before the due date, and it's not 28 days.
 
The note is very clear.
1. Use the entire balance, not remaining balance.
2. What is 28 in your calculations? The applicable period is from the day of processing (not purchase) to the day before the due date, and it's not 28 days.


I apologize for the quality of the picture, every time I upload it the quality decreases significantly. As for your instructions:

1818.30(0.21)(38/365) = $39.75

Thank you for all your help!
 

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