Most Credit Cards Provide for a Minimum Finance Charge Of 70

question 48

Short Answer

Most credit cards provide for a minimum finance charge of $70$ cents per month. Suppose that you buy a $39 item, make five monthly payments of $5, and then pay the remaining balance. What are the payments and the total interest for this purchase if the interest rate is 12% but you pay the minimum finance charge? 5 payments of $ __________ plus a last payment of $ __________. Total payments of $ __________ with interest of $ __________.

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Definitions:

Accounting Period

The specific time period during which financial transactions are recorded and financial statements are prepared, typically a quarter or a year.

Cost of Goods Sold

The total cost directly attributed to the production of goods sold by a company, including materials and labor costs but excluding indirect expenses.

Operating Expenses

Costs associated with a company's main operational activities, excluding the cost of goods sold.

Merchandising Companies

Companies that buy and sell goods without fundamentally changing their condition; they are involved in retail or wholesale.