Abby has a credit card which uses the adjusted balance method to compute finance charges. her card has an apr of 11.83%, and she is on a 30-day billing cycle. the table below shows her transactions in the month of january. date amount ($) transaction 1/1 722.10 beginning balance 1/6 18.12 purchase 1/7 65.00 payment 1/14 18.00 purchase 1/20 44.79 purchase 1/23 34.25 purchase 1/27 40.00 payment what will abby’s january finance charge be?

Solution:

APR= 11.83 % yearly

Monthly APR = % =0. 99 %(approx)

Beginning balance= $722.10

Purchase = -$18.12

Payment= $ 65.00

Purchase = -$18.00

Purchase=-$ 44.79

Purchase= -$ 34.25

Payment= $ 40.00

Sum of total Purchase in January= 18.12 + 18 + 44.79+34.25=$115.16

Sum of Total payment  in January= 65 + 40 =$105

Total Amount in Abby's account in month of January when purchases and payments are done = 722.10 -115.16 +105

                                   = $ 711.94

Abby’s January finance charge = 0.99% of $ 711.94= $ 7.01 (approx)