Answer:

Our answer is revolving credit.

Revolving credit:

Loan made on a continuous basis and billed periodically. Borrower makes minimum monthly payments or more and pays interest on the outstanding balance. This is a form of open-end credit extended by many retail stores and credit card companies.

Answer:

The given data is the amount financed is $7,590.00

The number of payments is 36

And monthly payment is $261.44

To find the finance charge:

The finance charge can be found by subtracting the amount financed from the total amount of installment payments

That means,

To calculate the finance charge, we must find the total amount of installment payments

To find the total amount of installment payments:

When the amount of the monthly payments is known, the total amount of installment payments can be found by multiplying the monthly payment amount by the number of payments

Since, by given information, the monthly payment amount is $261.44

And the number of payments is 36

For finance charge,

So, the finance charge is $1,821.84

a) To find annual percentage rate:

When annual percentage rate (APR) tables are not available, the annual percentage rate can be closely approximated by the formula

Here, I is the finance charge on the loan

P is the principal, or amount financed

And n is the number of months of the loan

By given hypothesis,

By substituting these values in the APR formula,

So, the annual percentage rate of the loan is 14.47%

b) To verify the answer by using APR table:

Calculate the finance charge per $100.

So, the finance charge per $100 is $24.00

Using table 13-1, scan down the number of payments column to 36 payments

Scan to the right in that number of payments row until you find $24.00, the finance charge per $100

Looking at the top of the column containing the $24.00, you will find the annual percentage rate for the loan to be 14.75%

Therefore, the annual percentage rate of the loan is

And the annual percentage rate by using table is

Answer:

To calculate the daily balances and their sum, set up a chart like the one below that lists the activity in the account by dates and number of days

Now to find the average daily balance:

Here, the sum of the daily balances is $13,226.82

And days in billing cycle is 30

Therefore, the average daily balance for the month of January is

.

To find the periodic rate:

Divide the annual percentage rate by 12 to find the monthly or periodic interest rate.

So, the annual percentage rate is 1.08%

b) To find financial charge:

Calculate the finance charge by multiplying the previous month's balance by the periodic interest rate from step 1.

Therefore, the finance charge is

c) To find the new balance:

Total all the purchases and cash advances for the month

All the purchases and cash advances for the month is

Total all the payments and credits for the month

Since, given that all the payments and credits for the months is $550

Use the following formula to determine the new balance:

Therefore, the average daily balance is

The new balance is

The finance charge of charge in the month of September is

.