Calculate the monthly finance charge if the average daily balance is $20, the daily periodic rate is 0.05%, and the number of days in the cycle is 30.
a) 30 cents.
b) 31 cents.
c) 50 cents.

To solve the problem above, we must first find the daily finance charge and multiply it by 30, for the number of days in the month cycle is 30. 0.05% or 0.0005 times $20 is $ 0.01, or 1 cent. Multiply that by 30 to get the monthly finance charge which is, 0.01 x 30 = $ 0.30 or 30 cents. The Answer is A. 30 cents.