Problem
Nancy Tai has recently opened a revolving charge account with MasterCard. Her credit limit is $1,000 but she has not charged that much since opening the account. Nancy hasn't had time to review her monthly statements promptly as she should, but is doing so now after she spilled coffee all over it.
In reviewing November's statement she notices that her beginning balance was $600 on November 1 and that she made a $200 payment on Nov. 10. She also charged $80 on 11/5, $100 on 11/15, and $50 on 11/29. She remembers seeing 16% and the letters APR on last month's bill that has coffee spilled on it and is illegible. Also, the back of her statement indicates that interest is charged using the average daily balance method, including current purchases.
1. Find the unpaid balance on November 30th before the interest is charged.
2. Assuming a 30 day period in November, find the average daily balance.
3. Calculate the finance charge for November. (What would be the monthly interest rate if the rate is stated as 16% per year?)
4. What is the unpaid balance for her bill dated December 1?