Unit 4 Review #1

Unit 4 Review #1

By Jude Platukis

Take the APR and divide it by:

MONTHLY: ​ APR / 12

DAILY: APR / 365​

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​Some text here about the topic of discussion.

Daily and Monthly periodic rate

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Joe John goes to the local bank to procure a cash advance. His APR given was 28%. He borrows $1,500, with interest paid for 45 days. In addition he had to pay a flat 4% fee. What was his total finance charge? ​

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Multiple Choice

If I have an 18% APR, what is my monthly INTEREST RATE?

• 1.5%
• 12%
• 18%
• 2.5%

Multiple Choice

Given a daily periodic rate of 0.05031%, calculate the daily interest charge if the average daily balance is $2,453.85

• $123.45

• $1.23

• $14.81

• $450.60

Multiple Choice

Hannah did not pay her American Express credit card bill in full in May. Her June bill showed a finance charge, and she wants to see whether or not it is correct. The average daily balance is $16,325.72, and the APR is 19.99%. Find the finance charge for her June statement.

• $301.75

• $272.41

• $92.93

• $403.97

​ 1) Need monthly rate since we are looking at one month 19.99% / 12 = 0.0167

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2) I = PRT I = 16,352.72 x (19.99%/12) x 1 month = ​$272.41

Multiple Choice

If Rocky's credit card has a $1,329.64 balance and he charged $528.44 in new purchases, what is the new balance?

• $1,972.32

• $1,867.45

• $896.45

• $1,858.08

Multiple Choice

Mary’s average daily balance for last month was $750. The finance charge was $12.24. What was the APR? (DONT FORGET TO MULTIPLY BY 12. IF NOT, YOU ARE GIVEN THE MONTHLY RATE)

• 0.0163%

• 19.6%

• 1.63%

• 0.196%

Multiple Choice

Piper's credit card has a $9626.42 balance. She makes a $1,523 payment. What is the new balance?

• $8103.42

• $9402.92

• $43.07

• $782.43

Multiple Choice

What is a finance charge?

• The amount of interest charged to an account for the billing cycle. 
• A fixed annual percentage rate of the finance charge.
• A charge from the bank for getting a credit card. 
• None of the above. 

Multiple Choice

Annual Percentage Rate (APR) is the yearly percentage rate of the finance charge. 

• True
• False 

Multiple Choice

Balance - $10,000
Interest Rate - 2.7%
How much did you pay in interest?

• $270.00
• $280.00
• $275.00
• $273.00

Multiple Choice

Assuming the APR on your credit card is​ 18% and your average daily balance this month was​ $10,000, what will your interest or finance charges for the month​ be? Use monthly periodic rate.

• $60

• $150

• ​$1.50

• $180

Multiple Choice

Mary’s average daily balance for last month was $1026.25. The finance charge was $15.36. What was the APR?

• 0.014%

• 19.6%

• 18%

• 14%

Multiple Choice

Kate and Albert do not pay their credit card in full each month, so they incur finance charges. On their last credit card statement, the average daily balance is $896 and the monthly periodic rate is 2.75%. What should the finance charge be on the statement?

• $2,464
• $24.64
• $29,568
• $29.68