Let's break down how to calculate the finance charge on a credit card with the given balance and APR.
1. Identify the given values:
- The balance on the account is [tex]$660.30.
- The Annual Percentage Rate (APR) is 6.2%.
2. Convert the APR to a decimal form:
- APR of 6.2% can be written as 0.062 in decimal form.
3. Determine the monthly interest rate:
- The APR is an annual rate. To find the monthly interest rate, you divide the APR by 12 (the number of months in a year).
- Thus, the monthly interest rate is \( \frac{0.062}{12} = 0.005166666666666667 \).
4. Calculate the finance charge:
- The finance charge is determined by multiplying the balance by the monthly interest rate.
- Therefore:
\[
\text{Finance Charge} = \text{Balance} \times \text{Monthly Interest Rate} = 660.30 \times 0.005166666666666667 \approx 3.4115499999999996
\]
Thus, the finance charge on the credit card account with a balance of $[/tex]660.30 at an APR of 6.2% is approximately $3.41.
