Solve the Problem The Interest Rate on the Card Is 1

question 130

Multiple Choice

Solve the problem.
-On the April 25 billing date, Malcolm had a balance due of $1507.63 on his credit card. The Transactions during the following month were: $$\begin{array} { l l r } \text { April 26} &\text {Payment } & \$ 155.83 \\\text { April 30 } & \text { Charge: lawnmower } & \$ 214.56 \\\text { May 3 } & \text { Charge: gift } & \$ 79.46 \\\text { May 7 } & \text { Charge: furniture } & \$ 611.63\end{array}$$
The interest rate on the card is 1.7% per month. Using the average daily balance method, find the Balance due on May 25 (April has 30 days) .

• A) $2283.08
• B) $2291.64
• C) $2290.79
• D) $1540.97

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Definitions:

Depreciation Expense

The cost allocated to reflect the reduction in value of a tangible asset over its useful life, as part of the wear and tear or obsolescence.

Depreciation

A method of allocating the cost of a physical or tangible asset over its expected usable life to account for decreases in value over time.

Residual Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Asset Cost

The total amount incurred to acquire an asset, including purchase price and all expenditures necessary to bring the asset to its intended use.