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2018 Homework: Section 8.3 Homework HW Score: 40.7 8.3.37 is $240. The t

Calculation of finance charge on the credit card account using unpaid balance method:

Starting balance from previous month = $240

Formula for finance charge on unpaid balance = unpaid balance*rate of interest*no. of unpaid balance days / 365.

(A) Finance charge on $240 (unpaid balance) for 5 days from August 1^st to August 5^th = $240*22%*5/ (365) = $0.72

(B) Finance charge on $327-unpaid balance ($240+$87) for 1 day from August 6^th to August 7^th =$327*22%/ (365) = $0.20

(C) Finance charge on $477-unpaid balance ($327+$150) for 6 days from August 7^th to August 12^th = $ 477*22%*6/ (365) = $1.73

(D) Finance charge on $501-unpaid balance ($477+$24) for 13 days from August 13^th to August 25^th = $501*22%*13/ (365) = $3.93

(E) Finance charge on $526-unpaid balance ($501+$25) for 6 days from August 26^th to August 31^st = $526*22%*6/ (365) = $1.90

Therefore, finance charge for the month of August on the credit card account is (A+B+C+D+E) = $ 8.47.