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your bank card has an apr of 21 percent and there is a 3 percent fee for cash advances. the bank starts charging interest on cash advances immediately. you get a cash advance of $500 on the first day of the month. you get your credit card bill at the end of the month. what is the approximate total finance charge you will pay on this cash advance for the month?

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Based on the APR to your bank card, the fee for cash advances and the cash advance, the approximate total finance charge that you will pay is $24.

How to find the finance charge?

The finance charge is the amount that is charged on cash advance that we spend on our credit card.

In this case, the bank charges inters on the cash advance as soon as it is spent. The total finance charge can then be found by the formula:

= ( Cash advance amount x ( APR / 12 months) ) + ( Cash advance amount x Fee percentage)

The approximate total finance charge for the month is therefore:

= (500 x ( 21% / 12)) + (500 x 3%)

= $23.75

= $24

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