To determine Andrew's March finance charge based on a 30-day billing cycle and an APR (Annual Percentage Rate) of 16.60% using the previous balance method, here are the steps that need to be followed:
1. Identify the Previous Balance and APR:
- Previous balance (beginning balance on 3/1): \[tex]$1,794.30
- APR (Annual Percentage Rate): 16.60%
2. Convert APR to a Daily Interest Rate:
- Since APR is annual, we convert it to a daily interest rate by dividing it by the number of days in a year (365 days).
- \[
\text{Daily Interest Rate} = \frac{\text{APR}}{365} = \frac{16.60\%}{365} = \frac{0.1660}{365} \approx 0.0004548
\]
3. Calculate the Finance Charge:
- The finance charge is calculated using the formula:
\[
\text{Finance Charge} = \text{Previous Balance} \times \text{Daily Interest Rate} \times \text{Number of Billing Cycle Days}
\]
- Given the previous balance of \$[/tex]1,794.30 and a billing cycle of 30 days, the finance charge calculation is:
[tex]\[
\text{Finance Charge} = 1794.30 \times 0.0004548 \times 30 \approx 24.48
\][/tex]
4. Select the Correct Answer:
- From the available choices:
- a. \[tex]$46.07
- b. \$[/tex]28.66
- c. \[tex]$21.36
- d. \$[/tex]24.82
- The closest and most accurate answer to our calculated finance charge of approximately \[tex]$24.48 is:
- d. \$[/tex]24.82
Therefore, the best answer from the provided choices is [tex]\( \boxed{\$24.82} \)[/tex].
