A firm has a $75,000 line of credit. The annual percentage rate is the current prime rate plus 4.5%. The balance on November 1 was $12,300. On November 7, the firm borrowed $16,700 to pay for merchandise, and on November 21 it borrowed another $8,800. On November 26, a $20,000 payment was made on the account. The billing cycle for November has 30 days. If the current prime rate is 8 ½%, what is the finance charge on the account, and what is the firm’s new balance?
What is the finance charge?
a) $3283.8 b) $273.65 c) $98,514 d) $109.46
What is the daily average balance for November?
a) $24,600 b) $25,260 c) $12,300 d) $757,800
What is the new balance for this firm?