Question

Calculating Annuities, Payment Plans & Amortization: A Sears Revolving Charge Card has a monthly rate of 1.75%. the interest is a minimum of $0.50 if the average daily balance is $28.50 or less. Explain how this policy is beneficial to Sears

Answer 1

.0175(28.50) is 50 cents, so at any balance less than that, an interest charge of 50 cents would represent a rate higher than 1.75% per month

Answer 2

Thank you!