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Financial Maths, STD2 EQ-Bank 27

A credit card account has no interest-free period. Compound interest is calculated daily at a rate of 18.5% per annum and charged to the account up to and including the statement date.

A single purchase of $1500 was made and interest accrued on the purchase for 28 days, including the statement date. There were no other purchases on the account.

  1. Calculate the closing balance on the statement date.   (2 marks)

  2. The minimum payment is calculated as $30 or 3% of the closing balance, whichever is greater. Calculate the minimum payment due.   (2 marks)

Show Answers Only

a.    \(\$1521.43\)

b.    \(\$45.64\)

Show Worked Solution

a.    \(\text{Daily interest rate} = \dfrac{0.185}{365}\)
  

\(\text{Closing balance}\) \(= 1500\left(1+\dfrac{0.185}{365}\right)^{28}\)
  \(= 1521.433\ldots\)
  \(= \$1521.43\)

  

b.    \(3\% \text{ of closing balance} = 0.03 \times 1521.43= \$45.64\)

\(\text{Since } \$45.64 > \$30, \text{ the minimum payment due is } \$45.64.\)

Financial Maths, STD2 F4 2019 HSC 27

Ashley has a credit card with the following conditions:

  • There is no interest-free period.
  • Interest is charged at the end of each month at 18.25% per annum, compounding daily, from the purchase date (included) to the last day of the month (included).

Ashley's credit card statement for April is shown, with some figures missing.

The minimum payment is calculated as 2% of the closing balance on 30 April.

Calculate the minimum payment.   (3 marks)

Show Answers Only

`$74.41`

Show Worked Solution

`text(Daily interest)= 18.25/(100 xx 365)= 0.0005`

♦ Mean mark 39%.

`text(Closing balance)= 3700(1.0005)^11= 3720.40`
  

`:.\ text(Minimum payment)` `= 3720.40 xx 0.02`
  `= $74.408…= $74.41\ \ text{(nearest cent)}`

Financial Maths, STD2 F4 2010* HSC 22 MC

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.
 

2010 22 mc

What is the minimum payment due on this account? 

  1. $23.56
  2. $25.00
  3. $86.08
  4. $87.20
Show Answers Only

`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`