Answer:
Finance charge is $100.34
Step-by-step explanation:
Given : The table attached in the question and the charge is computed on average daily balance at a periodic monthly rate of 3.2%.
To find : What is the finance charge?
Solution :
We have given the number of days and sum of balances.
So, we find the finance charge of each dates one by one.
Finance rate = 3.2%=0.032
Using the formula,
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Refer the table,
First finance charge is,
Number of days=5, Total number of days = 31 , Finance rate = 0.032 , sum of balance=$1375
\(F_1=\frac{5}{31}\times 1375\times 0.032\)
\(F_1=7.096\)
Similarly, we put all the values from the table and we get,
\(F_2=\frac{1}{31}\times 385\times 0.032\)
\(F_2=0.397\)
\(F_3=\frac{9}{31}\times 3465\times 0.032\)
\(F_3=32.190\)
\(F_4=\frac{1}{31}\times 260\times 0.032\)
\(F_4=0.268\)
\(F_5=\frac{15}{31}\times 3900\times 0.032\)
\(F_5=60.387\)
Now, the total finance charge is
\(F=F_1+F_2+F_3+F_4+F_5\)
\(F=7.096+0.397+32.190+0.268+60.387\)
\(F=\$100.34\)
$1=100 cent
$100.34=10034 cent.
