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Gloria's credit card charges an annual interest rate of 18.5% (0.05068% per day),...

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ninaesl | Student, Undergraduate | (Level 1) Honors

Posted April 7, 2013 at 3:20 AM via web

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Gloria's credit card charges an annual interest rate of 18.5% (0.05068% per day), compounded daily, on any outstanding balance. Her current outstanding balance is $2830.58. There is a minimum payment of $50.00 or 3% of balance, whichever is larger. Her due date is March 8th. Calculate her balance on April 8th, assuming she makes no more purchases with her credit card.
Calculate minimum payment due on March 8, outstanding payment and minimum payment on April 8.

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justaguide | College Teacher | (Level 2) Distinguished Educator

Posted April 7, 2013 at 2:03 PM (Answer #1)

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Gloria's current outstanding balance is $2830.58. Interest is charged at 0.05068% per day compounded daily.

Her due date is March 8. The minimum amount due on March 8 is $50 or 3% of the outstanding balance, whichever is larger. 3% of $2830.58 is $84.92. As 84.92 > 50, her minimum due is $84.92.

If she only makes the minimum payment of $84.92 on March 8, the outstanding balance on April 8 is 2745.66*(1.0005068)^30 = $2787.71. The minimum amount due on April 30 is $83.63

The balance outstanding on April 8 is 2745.66

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