smc-6847-20-Credit Card Statements

In June, Ms Bigspender received a statement for her credit card account.

The account has no interest-free period. Compound interest is calculated daily and charged to her account on the statement date.

For how many days is she charged interest on her purchase? (1 mark)

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Calculate the interest charged to her account. (2 marks)

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a. `29`

b. `$8.98`

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a. `text(# Days interest charged)`

`=\ text{9 (in May) + 20 (in June)}= 29`

b. `text(Daily interest rate)\ (r) = 0.0498/100=0.000498`

`text(Closing Balance)\ (FV)`	`= PV(1+r)^n`
	`= 617.72(1.000498)^29= $626.703`

`:.\ text(Interest charged)=626.70-617.72=$8.98`

In July, Ms Alott received a statement for her credit card account. The account has no interest free period. Compound interest is calculated daily and charged to her account on the statement date.

What is the minimum payment due on this account?

$23.56
$25.00
$86.08
$87.20

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`D`

Show Worked Solution

`text(Days of interest)\ (n) =2+23=25`

♦♦♦ Mean mark 20%. Lowest scoring MC question in the 2010 exam.

`text(Daily interest rate)\ (r) = 0.0521/100 = 0.000521`

`text(Closing Balance)\ (FV)`	`=PV(1+r)^n`
	`=1721.50 (1.000521)^25=$1744.06`

`text(5% of closing balance)=5/100xx1744.06=87.20\ text{(nearest cent)}`

`text(S)text(ince)\ $87.20>$25\ , text(minimum payment)=$87.20`

`=>D`

Financial Maths, STD2 F4 2006* HSC 25b

Financial Maths, STD2 F4 2010* HSC 22 MC