Laura's credit card has an APR of 12.04%, and it computes finance charges using the daily balance method and a 30-day billing cycle. On June 1st, Laura had a balance of $606.40. She made exactly one transaction in June: a payment of $55.25. If Laura's finance charge for June was $5.71, on which day did she make the payment?

Question

Mathematics

Jensen Kelley

5 February, 08:12

Laura's credit card has an APR of 12.04%, and it computes finance charges using the daily balance method and a 30-day billing cycle. On June 1st, Laura had a balance of $606.40. She made exactly one transaction in June: a payment of $55.25. If Laura's finance charge for June was $5.71, on which day did she make the payment?

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Answers (1)

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Savanna Shah · Answer 1

Finance charge is equal to:

daily balance*A*P*R*billing cycle/365

db 0.1204 30/365 = 5.71

db = 577.01 (I am rounding every answer, and keeping the number in my calculator, things won't work out exactly if you calculate using my numbers) Manipulate the formula for mean:

average = total/amount

577.01 = total/30

total over 30 days = 17,310.22Set up an equation with our information:

606.40x + 55.25 (30-x) = 17,310.22

551.15x = 16,652.72

x = 28.4

The balance was $606.40 for 28 days, so she paid on the 29th.