The Mathematics of Money

Copyright © 2008, The McGraw-Hill Companies, Inc.

7. a. If Daeshawn’s credit card carries a 10.99% interest rate, how much interest will he pay for the billing period from
   Exercise 3?
   b. What will be his total balance on his December 27 statement?


8. a. Erik’s credit card’s interest rate is 17.95%. How much interest will he owe for the billing period in Exercise 4?
   b. What will the total balance be on his February 1 statement?

C. The Grace Period

In each of the following situations, determine whether or not any interest would be owed for the billing period. It is not

necessary to calculate the amount of interest due (if any). However, if interest will be owed, specify the reason (or reasons)

why the grace period does not apply. Assume that the grace period is 20 days in each problem.

9. Dave’s credit card billing period ends on the sixth of the month. On October 6, his balance was $750.41. He made
   charges of $175.00 on October 9 and $308.92 on October 11, and paid $750.41 on October 25. Will he owe any
   interest on his November 6 statement?


10. The billing period for Ellie’s MasterCard ends on the third of each month. On February 3 her balance was $205.19,
    which she paid in full on February 15. She made charges of $119.75 on February 28, $71.11 on March 1, and
    $938.75 on March 2. Will she owe any interest on her March 3 statement?


11. The billing period of Kent’s Visa card ends on the 19th of each month. On December 19 his balance was $2,458.19.
    He made charges of $355.49 on December 27, $101.01 on January 5, and $317.52 on January 6, and he paid $800
    on January 3. Will he owe any interest on his January 19 bill?


12. My credit card statement is produced on the 23rd of every month. On April 23 I owed $829.15, which I paid in full on
    May 15. The only charge I made during the next billing period was $89.95 on May 17. Will I owe any interest for my
    May 23 bill if I pay it in full on May 31?

D. Other Fees and Expenses

13. Jack’s Solar Gadget Shoppe sold a radio for $78.35 and accepted a credit card payment. The commission was 1.75%.
    How much was the commission? How much did Jack actually get paid for the radio?


14. Paula paid $127.45 for groceries, using her debit card. The store paid a commission of 50 cents plus 1.35%. How
    much was the commission? How much did the grocery store actually receive?


15. Mom N Pop’s Big Box Hyper Mart accepted a debit card payment of $199.59. The commission charged was 50 cents
    plus 1¼%. How much did Mom and Pop actually receive?


16. Mamiko charged $407.59 to her credit card for a new stereo system. The retailer paid a commission of 2¼%. How
    much did the retailer actually receive for the stereo?

Exercises 10.1 429