Solve the Problem The Interest Rate on the Card Is 1

question 26

Multiple Choice

Solve the problem.
-On the April 2 billing date, Monica had a balance due of $1598.54 on her credit card. The Transactions during the following month were: $\begin{array}{ll}\text { April } 4 \text { Charge: textbooks } &\$ 358.56 \\\text { April } 7 \text { Payment } & \$ 151.29 \\\text { April } 19 \text { Charge: gasoline } & \$ 24.04 \\\text { April } 21 \text { Charge: fertilizer } & \$ 31.24\end{array}$

The interest rate on the card is 1.2% per month. Using the average daily balance method, find the Finance charge on May 2 (April has 30 days) .

• A) $20.85
• B) $21.95
• C) $21.96
• D) $22.05

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Definitions:

Tax Court's Method

Procedures and legal principles used by the United States Tax Court to resolve disputes between taxpayers and the IRS.

IRS Method

Specific procedures or guidelines established by the Internal Revenue Service for filing taxes, calculating depreciation, or determining fair market value, among others.

Personal Use

The use of a property or asset for individual needs or enjoyment, as opposed to business or income-producing purposes.

Royalty Income

Income received from the use of one's property or assets, such as patents, copyrighted works, or natural resources, by another party.