Credit Card Payments! (1 Viewer)

[rr.dun.dun]

Ian has a credit card with no interest-free period and an interest rate of 4% p.a. He makes the following purchases for the period 1 October to 31 October:

4 October Swim Trunks $38.50
18 October Fins and Mask $120.00
19 October Swimming Lessons $65.00
25 October Wetsuit $135.50
28 October Towel $32.00

a) What is the total amount of his purchases?
b) Ian pays his account in full on 5 November. How much does he pay?


Can someone please explain to me how to answer this question? I don't understand it.

Thank You.

 

[rr.dun.dun]

Woops, sorry, I deleted that post.

um okay then.. nevermind i suppose.

 

[rr.dun.dun]

Anyone know how to answer this question, who are currently or have done Year 12 General Math?

 

[PC]

There are actually two schools of thought on this type of question.
1. Some people say that interest is charged on the total amount owing at the time of repayment for the time since the FIRST item was purchased. In other words, you might as well have bought everything at the same time because the interest charge will be the same.
2. Others say that interest is calculated on each item separately as they are purchased at different times. This is especially important when a credit card has an interest-free period.

Anyway:

Method 1:
Total purchase = 38.50 + 120.00 + 65.00 + 135.50 + 32.00
= $391.00
Number of days from 4 Oct to 5 Nov = 27 + 5
= 32
.: Interest charged = Prn
= 391 x (0.04 ÷ 365) x 32
= $1.37
.: Total to repay = 391.00 + 1.37 = $392.37

Method 2:
Interest on Swim Trunks = 38.50 x (0.04 ÷ 365) x 32 = $0.1350
Interest on Fins and Mask = 120.00 x (0.04 ÷ 365) x 18 = $0.2367
Interest on Swimming Lessons = 65.00 x (0.04 ÷ 365) x 17 = $0.1211
Interest on Wetsuit = 135.50 x (0.04 ÷ 365) x 11 = $0.1633
Interest on Towel = 32.00 x (0.04 ÷ 365) x 8 = $0.0281
.: Total interest = 0.1350 + 0.2367 + 0.1211 + 0.1633 + 0.0281
= 0.6842
= $0.68
.: Total to repay = 391.00 + 0.68 = $391.68

Hope this helps.

 

[rr.dun.dun]

There are actually two schools of thought on this type of question.
1. Some people say that interest is charged on the total amount owing at the time of repayment for the time since the FIRST item was purchased. In other words, you might as well have bought everything at the same time because the interest charge will be the same.
2. Others say that interest is calculated on each item separately as they are purchased at different times. This is especially important when a credit card has an interest-free period.

Anyway:

Method 1:
Total purchase = 38.50 + 120.00 + 65.00 + 135.50 + 32.00
= $391.00
Number of days from 4 Oct to 5 Nov = 27 + 5
= 32
.: Interest charged = Prn
= 391 x (0.04 ÷ 365) x 32
= $1.37
.: Total to repay = 391.00 + 1.37 = $392.37

Method 2:
Interest on Swim Trunks = 38.50 x (0.04 ÷ 365) x 32 = $0.1350
Interest on Fins and Mask = 120.00 x (0.04 ÷ 365) x 18 = $0.2367
Interest on Swimming Lessons = 65.00 x (0.04 ÷ 365) x 17 = $0.1211
Interest on Wetsuit = 135.50 x (0.04 ÷ 365) x 11 = $0.1633
Interest on Towel = 32.00 x (0.04 ÷ 365) x 8 = $0.0281
.: Total interest = 0.1350 + 0.2367 + 0.1211 + 0.1633 + 0.0281
= 0.6842
= $0.68
.: Total to repay = 391.00 + 0.68 = $391.68

Hope this helps.

OH MY GOD! LOL.

I'm so sorry, I meant to write 14%... =/

sorry. try it now

 

[freakyzu]

PC: how is the number of days from 1st october to 5th november 32 days...........its 36 days

 

[PC]

how is the number of days from 1st october to 5th november 32 days...........its 36 days

The first purchase took place on 4 October. So, depending on your point of view you'd have either 32 or 33 days.

In my opinion, DON'T count the first day. If you can buy it on that day, why would you pay interest? Conversely, if you want to count the first day cause you haven't paid for the item by close of trade then you wouldn't count the last day cause you've paid for it.

So ... October 5, 6, 7, 8, 9, 10 is 6 days, 11-20 is 10 more days, 21-30 is 10 more days, 31st is 1 more day, then November 1, 2, 3, 4, 5 is 5 more days. Total number = 6 + 10 + 10 + 1 + 5 = 32 days.

If you want to count the day of purchase then it's 33 days.

 

[Jonny90]

ok PC u think ur so f*cking smart eh?... well calculate the time in the "near future" when i shove Nikes up that f*cking ass of urs and yes.... scream my name!!.
Now remember: Time= Distance divide by Speed
So ill be seeing u soon f*cker!

Hope this helps..... Peace