A Credit Card Statement Showed These Transactions During October The Credit Card Has an Interest Rate Of

question 27

Multiple Choice

A credit card statement showed these transactions during October.
$\begin{array} { l l r } \text { October 1 } & \text { Previous balance } & \$ 103.93 \\ \text { October 12 } & \text { Purchases } & \$ 86.42 \\ \text { October 29 } & \text { Payment } & \$ 170.00 \end{array}$
The credit card has an interest rate of $6 \%$ on the average daily balance. Find the average daily balance, the finance charge for the month, and the new balance on November 1 . [Hint: Remember that October has 31 days.]

• A) Average daily balance = $195.36; finance charge = $11.72; new balance = $32.07
• B) Average daily balance = $143.23; finance charge = $8.59; new balance = $28.94
• C) Average daily balance = $141.14; finance charge = $8.47; new balance = $28.82
• D) Average daily balance = $145.61; finance charge = $8.74; new balance = $29.09

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Definitions:

Accumulated Depreciation

The total depreciation amount that has been charged against a fixed asset's cost over its useful life to reflect wear and tear.

Equipment

Tangible property owned by a business used in operations, such as machinery, vehicles, or computers.

Balance

The difference between the total debits and credits in an account, or the equilibrium between two opposing forces or aspects.

Revaluation Surplus

This is the increase in value of an asset after it has been appraised again and is recorded as a gain in equity under a company's financials.