Answered

Westonci.ca is the best place to get answers to your questions, provided by a community of experienced and knowledgeable experts. Explore thousands of questions and answers from knowledgeable experts in various fields on our Q&A platform. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

Your bank card has an APR of 21% and there is a 3% fee for cash advances. The bank starts charging interest on cash advances immediately. You get a cash advance of $500 on the first day of the month. You get your credit card bill at the end of the month. What is the approximate total finance charge you will pay on this cash advance for the month

Sagot :

Kolawole845

Answer:

Total finance charge=$23.75

Explanation:

The amount charged for the use of the fund by a bank is called interest rate. Here it is quoted as 21% per annum but we will need to determine the approximate monthly rate by dividing by 12.

The total finance charge will be equal = Interest rate + advance fee

Monthly interest rate = 21/12 =1.75%

Interest payment = 1.75%× $500=$8.75

Advance fee = 3%× $500= $15

Total finance charge = $8.75 +  $15= $23.75

Total finance charge=$23.75

Visit us again for up-to-date and reliable answers. We're always ready to assist you with your informational needs. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.