Question 3:

(20 points)

3. In the month of April, your credit card (which is charging you 9.9% + the current prime interest rate) has a balance of \$1000. On April 3rd you charge \$100, then on April 20th you put 15 gallons of gas on the card. On April 23rd your payment of \$400 arrives and is posted to your account. Finally, on April 27th you charge all of your food for the month for your family of 4.

a)    What is your average daily balance at the end of the month on this card? Hint: You will need to research and find the cost of gas and food in order to solve this. Use the national average as of four months before the date Assignment is due. For instance, if your Assignment is due November 3rd, 2012, use the July 2012 national average.

20

Average cost of gas is estimated at \$3.50 and food for family of 4 is \$1252.20

4/1- \$1000 beginning balance

4/3- \$100. charged

4/20- \$ 52.50 charge for gas 3.50*15 gallons

4/23-\$400.00 PAYMENT APPLIED

4/27- \$1252.20 food

4/30- end of billing period for month of April

3-1=2 * \$1000= \$2000.00

20-3=17 * 1100= 18700.00

23-20=3 * 1152.50= 3457.50

27-23=4 * 752.50= 3010.00

30-27+1=4 * 2004.7= 8018.80

So add 2000.00+18700.00+3457.50+3010.00+8018.80= 35186.30/30= \$1172.88