Answer:
The finance charge is:
Option: B
B. 63 cents.
Step-by-step explanation:
We are given:
Average daily balance = $30
The daily periodic rate = 0.07%
and Number of days in a cycle is 30.
We know that the formula for the finance charge is given as:
[tex]Finance\ charge=\dfrac{APR\cdot Balance\cdot Number\ of\ days\ in\ billing\ cycle}{365}[/tex]
As we are given daily periodic rate this means that:
[tex]\dfrac{APR}{365}=0.07\%=0.0007[/tex]
Hence, putting the value in the formula we have:
[tex]Finance\ charge=0.0007\times 30\times 30\\\\Finance\ charge=0.63[/tex]
finance charge=$ 0.63
As we know that:
1 dollar=100 cents.
Hence, 0.63 dollars=63 cents
Hence, the finance charge is:
63 cents
