Hi, how would I calculate the amount due on a credit card balance of $4000 with daily interest of 0.7% for 2 months?

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- Feb 18th 2010, 04:38 AMIfe[SOLVED] Interest on credit card
Hi, how would I calculate the amount due on a credit card balance of $4000 with daily interest of 0.7% for 2 months?

- Feb 18th 2010, 07:31 AMjass10816
Is the annual rate 0.7% and it's compounded daily? Or, if 0.7% is a daily rate, how often is it compounded?

The general formula for total amount due after n years (2 months would be 2/12 years) is $\displaystyle 4000(1+\frac{r}{m})^{nm}$ Where r is the annual interest rate, m is the compounding period and n is the number of years. If it is an annual rate of 0.7% and it's compounded daily for 2 months you get $\displaystyle 4000(1+\frac{0.007}{12})^{\frac{2}{12}*12}$ - Feb 21st 2010, 08:25 PMIfe
thanks a lot. i had the same working. just needed confirmation. thanks again :)