4-4 & 4-5: Credit Cards & Statements

Front

What is the formula to convert APR to monthly percentage rate?

Back

Monthly Percentage Rate (MPR) = APR / 12

Front

If a credit card has an APR of 30%, what is the monthly percentage rate?

Back

2.5%

Front

How do you calculate the finance charge on a credit card?

Back

Finance Charge = Average Daily Balance x Monthly Percentage Rate

Front

If the APR is 16.5% and the average daily balance is $4,500, what is the finance charge?

Back

$61.88

Front

What is the average daily balance if you have the following balances: 5 Days: $1000, 5 Days: $2000, 5 Days: $3000, 5 Days: $4000, 5 Days: $5000, 5 Days: $6000?

Back

$3500

Front

How do you find the average daily balance over a billing period?

Back

Average Daily Balance = (Sum of Daily Balances) / (Number of Days)

Front

If you have the following balances: 14 Days: $9231.48, 10 Days: $9537.92, 4 Days: $9545.88, what is the average daily balance?

Back

$9385.84

Front

What is the average daily balance for the following: 25 Days: $1039.54, 5 Days: $1045.79, 1 Day: $1050.88?

Back

$1040.91

Front

What does APR stand for in credit cards?

Back

Annual Percentage Rate

Front

What is the significance of the APR in credit card usage?

Back

It represents the yearly interest rate charged on borrowed money.