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,
[tex]F=\frac{\text{No. of days}}{\text{total days}}\times \text{sum of balance}\times \text{finance rate}[/tex]
Refer the table,
First finance charge is,
Number of days=5, Total number of days = 31 , Finance rate = 0.032 , sum of balance=$1375
[tex]F_1=\frac{5}{31}\times 1375\times 0.032[/tex]
[tex]F_1=7.096[/tex]
Similarly, we put all the values from the table and we get,
[tex]F_2=\frac{1}{31}\times 385\times 0.032[/tex]
[tex]F_2=0.397[/tex]
[tex]F_3=\frac{9}{31}\times 3465\times 0.032[/tex]
[tex]F_3=32.190[/tex]
[tex]F_4=\frac{1}{31}\times 260\times 0.032[/tex]
[tex]F_4=0.268[/tex]
[tex]F_5=\frac{15}{31}\times 3900\times 0.032[/tex]
[tex]F_5=60.387[/tex]
Now, the total finance charge is
[tex]F=F_1+F_2+F_3+F_4+F_5[/tex]
[tex]F=7.096+0.397+32.190+0.268+60.387[/tex]
[tex]F=\$100.34[/tex]
$1=100 cent
$100.34=10034 cent.
