Final answer:
Credit card interest and finance charge calculations explained.
Explanation:
Credit card interest is calculated by multiplying your balance by the interest rate. For example, if you have [tex]$1000 on your credit card and the interest rate is 20%, the monthly interest charge would be $[/tex]1000 * 20% = $200.
To calculate a finance charge, which includes both the interest and fees, you can use a formula like: Finance Charge = Average Daily Balance x Daily Periodic Rate x Number of Days in Billing Cycle.
Regularly paying more than the minimum due helps to reduce the balance faster and minimize the total amount of interest paid over time.
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