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Fin533 Tutorial Consumer Credit

Kayrie received his credit card statement for charges between January 14 to February 13, 2018. He needs to calculate the average daily balance, interest charge, outstanding balance, minimum payment due, and remaining balance after paying the minimum amount. To do this, he lists out each transaction with the date, description, and debit/credit amount. He then completes a table showing the number of days in the period and the daily balances to calculate the total and average balances. The results will be used to determine the interest, total owed, minimum payment, and new balance.

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Nadia Abdullah
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353 views2 pages

Fin533 Tutorial Consumer Credit

Kayrie received his credit card statement for charges between January 14 to February 13, 2018. He needs to calculate the average daily balance, interest charge, outstanding balance, minimum payment due, and remaining balance after paying the minimum amount. To do this, he lists out each transaction with the date, description, and debit/credit amount. He then completes a table showing the number of days in the period and the daily balances to calculate the total and average balances. The results will be used to determine the interest, total owed, minimum payment, and new balance.

Uploaded by

Nadia Abdullah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CHAPTER 4 – SAMPLE QUESTION

CONSUMER CREDIT

Kayrie received his Visa Card bill for the period of January 14 to February 13, 2018. The
annual interest rate charged by the bank is 18% per annum. The minimum payment is set at
5% for his Visa Card. As usual, he will verify the monthly finance charges imposed on his
statement. The credit card statement for the stated period is provided.

Transaction Date Description Debit/Credit


(RM)
14-Jan-2018 Opening Balance 1,560
15-Jan-2018 Caltex Kuala Terengganu 150
17-Jan-2018 KFC Kuala Nerus 130
18-Jan-2018 Purchase textile from Indah Fabric 90
20-Jan-2018 Caltex D’ Lagoon 130
22-Jan-2018 Tesco Shah Alam 410
31-Jan-2018 Payment to Central Mobile 400

Compute the following, using average daily balance, including new purchases.

i) Average daily balance


ii) Interest charge
iii) Outstanding balance
iv) Minimum payment
v) Outstanding balance after minimum payment

(10 marks)
CHAPTER 4 – SAMPLE QUESTION

Period No of days Balance (RM) Aggregate Balance (RM)


(2018) (a)
(b) (c)=axb

14 /1 /

15-16/1 / / /

/ / /

/ / /

/ / /

/ / /

/ / /

TOTAL 31 - /

20 ticks x 0.25 = 5 marks

i) Average daily balance = Total loan / Total days = xxx = RMxxx (1 mark)

ii) Interest charge= 1.5% x Avg. Daily Balance = 1.5% x xxx = RMxxx (1 mark)

iii) Outstanding balance= O/stdg amount + Int. Charge = xxx + xxx = RMxxx (1 mark)

iv) Minimum payment= 5% x O/stdg Balance = 5% x xxx = RMxxx (1 mark)

v) Outstanding balance after minimum payment = O/stdg Balance – Min. amount


= xxx – xxx

= RMxxx (1 mark)

NOTE:

Payment to credit card/banks (minus)

Refund (minus)

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