The most common type of loan available to a consumer is a credit card. A credit card allows a consumer to borrow money to pay for things. The card comes with a limit which the borrower can not borrow more than. Interest is charged on what is borrowed in several different. The interest charged is called a finance charge.
Our goals for this section are to
- Compute payments for an add-on loan.
- Compute finance charges on a credit card using the unpaid balance method.
- Compute the average daily balance to determine credit card charges.
Use the workbook below to help you accomplish these objectives.
Section 5.3 Workbook (PDF) 11/2/19