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Chapter 8: Problem 36
To borrow money, you pawn your mountain bike. Based on the value of the bike, the pawnbroker loans you \(\$ 552\). One month later, you get the bike back by paying the pawnbroker \(\$ 851\). What annual interest rate did you pay?
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Exercises 1-2 involve credit cards that calculate interest using the average daily balance method. The monthly interest rate is \(1.5 \%\) of the average daily balance. Each exercise shows transactions that occurred during the March \(1-\) March 31 billing period. In each exercise, a. Find the average daily balance for the billing period. Round to the nearest cent. b. Find the interest to be paid on April 1, the next billing date. Round to the nearest cent. c. Find the balance due on April 1 . d. This credit card requires a \(\$ 10\) minimum monthly payment if the balance due at the end of the billing period is less than \(\$ 360\). Otherwise, the minimum monthly payment is \(\frac{1}{30}\) of the balance due at the end of the billing period, rounded up to the nearest whole dollar. What is the minimum monthly payment due by April 9 ? $$ \begin{array}{|l|c|} \hline \text { Transaction Description } & \text { Transaction Amount } \\ \hline \text { Previous balance, } \$ 6240.00 & \\ \hline \text { March 1 } \quad \text { Billing date } & \\ \hline \text { March 5 } \quad \text { Payment } & \$ 300 \text { credit } \\ \hline \text { March 7 } \quad \text { Charge: Restaurant } & \$ 40 \\ \hline \text { March 12 } \quad \text { Charge: Groceries } & \$ 90 \\ \hline \text { March 21 } \quad \text { Charge: Car Repairs } & \$ 230 \\ \hline \text { March 31 } \quad \text { End of billing period } & \\ \hline \text { Payment Due Date: April 9 } & \\ \hline \end{array} $$
A bank bills its credit card holders on the first of each month for each itemized billing. The card provides a 20-day period in which to pay the bill before charging interest. If the card holder wants to buy an expensive gift for a September 30 wedding but can't pay for it until November 5 , explain how this can be done without adding an interest charge.
In Exercises 1-10, a. Find the value of each annuity. Round to the nearest dollar b. Find the interest. $$ \begin{array}{l|l|l} \begin{array}{l} \$ 4000 \text { at the end of } \\ \text { each year } \end{array} & \begin{array}{l} 6.5 \% \text { compounded } \\ \text { annually } \end{array} & 40 \text { years } \end{array} $$
You decide to work part-time at a local veterinary hospital. The job pays \(\$ 9.50\) per hour and you work 20 hours per week. Your employer withholds \(10 \%\) of your gross pay for federal taxes, \(5.65 \%\) for FICA taxes, and \(5 \%\) for state taxes. a. What is your weekly gross pay? b. How much is withheld per week for federal taxes? c. How much is withheld per week for FICA taxes? d. How much is withheld per week for state taxes? e. What is your weekly net pay? f. What percentage of your gross pay is withheld for taxes? Round to the nearest tenth of a percent
\(A=\$ 14,000, r=9.5 \%, t=6\) years
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