What is the finance charge on the credit card account?

Question

Month: 31 days

Previous Month's Balance: $950

Interest Rate: 21%

 

Date                Transaction

May 3              made payment of $370

May 12            charged $106 for rental car

May 21            charged $95 for museum tickets

May 29            returned $69 for camera

Answer 1

assume Average Daily Balance of $712.00 after you add credits and subtract debits during the current cycle. With a 21% Annual Percentage Rate in a 31-day billing cycle.
Total Finance Fee Due for the Billing Cycle = $700.00 x 21% x 31 ÷ 365 = $12.48

 

Don't forget that the 21% can be rewritten by calculating the following equation: 21%/100 = 0.21

0.21 is the decimal value you use to determine the finance charge. If you use the value 21 instead of 0.21 your interest charge will be insanely high and that is an indication that you performed the problem incorrectly.