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Financial Maths, STD1 EQ-Bank 4 MC

A credit card has the following fees:

  • annual fee of \(\$90\)
  • late payment fee of \(\$20\) each time a payment is late
  • cash advance fee of \(\$5\) each time a cash advance is made

During one year, the cardholder made 2 late payments and 3 cash advances.

What is the total amount of fees charged for the year?

  1. \(\$55\)
  2. \(\$90\)
  3. \(\$130\)
  4. \(\$145\)
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\(D\)

Show Worked Solution

\(\text{Annual fee} = \$90\)

\(\text{Late payment fees} = 2 \times \$20 = \$40\)

\(\text{Cash advance fees} = 3 \times \$5 = \$15\)

\(\text{Total fees} = 90+40+15 = \$145\)
  

\(\Rightarrow D\)

Financial Maths, STD2 F4 2018* HSC 28d

Yanika opens a new credit card account, with interest and fees as shown.
 

Interest

    • Compound interest calculated daily at the rate 12.41% p.a.
    • No interest-free period

Fees

    • $0 for online repayments
    • $3 for repayments in cash (fee added to balance immediately after repayment)
        

Yanika makes a single purchase of $849 with the credit card.

  1. Show that the balance owing on the credit card 24 days after making the purchase is $855.95.   (2 marks)

  2. Yanika makes her first repayment 24 days after making the purchase. She makes a cash repayment of $450.

     

    What is the balance owing on the credit card immediately after her repayment is made and the repayment fee has been charged?   (1 mark)

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i.    `text(See Worked Solutions)`

ii.   `$408.95`

Show Worked Solution

i.    `text(Days of interest)\ (n) = 24`

♦ Mean mark part (i) 48%, part (ii) 49%.

`text(Daily interest rate)\ (r) = 0.1241/365 = 0.00034`

`text(Balance Owing)\ (FV)` `= PV(1+r)^n`
  `= 849(1.00034)^24`
  `= 855.954…=$855.95\ \ text{(nearest cent)}`

 

ii.   `text(Balance owing)= 855.95-450 + 3= $408.95`