Retail credit card case study

Retail Banking - Credit Card
Mr A drawing annual salary of Rs. 1500000 has been enjoying a credit card from your Bank.The bank has fixed a spending limit of Rs. 250000 lac on his card. During Dec,2014, he made purchase of Rs. 200000 and paid on due date (10 jan 2015) Rs. 140000 being a part of the outstanding amount of Rs. 250000.During Jan 2015,He wanted to make additional purchase of Rs. 100000 which bank allowed  and he made purchase on 11 jan 2015.Rate of interest charged by bank s 3 per month.
answer the following question

01. What would be the minimum payment requirement on credit card dues during any month?
a.3% of due
b.5% of due
c.8% of As due
d.10% of due

Ans: Minimum payment require 5%

02. As the bank charges interest at 3% per month, what would be the annual effective rate to the user?
a. 36%
b. 42.58%*
c. 39%
d. None of the above
Ans:b
Solution
Effective interest rate=(1+r)^n-1
=(1+0.03)^12-1
=1.42576-1
=0.42576
=42.58%

03. Daily interest charged on outstanding balance as on 11 jan,2015 will be
a. Rs.207.12*
b. Rs.210.72
c. Rs.202.10
d. Rs.207.00
Ans:a

Solution
Daily interest charged=Due outstanding*12/365*r
=(110000+100000)*12/365*0.03
=210000*12*.03/365
=75600/365
=207.12

04. Total interest Charged on 10 Feb,2015 will be
a. Rs.6420
b. Rs.6214*
c. Rs.6312
d. Rs.6210
Ans:b

Solution
Total interest charged= no of days outstanding * Daily interest
From 11 Jan 2015 to 10 Feb 2015 =30 days
=30*207.12
=6214

05. If Mr A wants to clear all his dues on the due date on 10 Feb 2015, what amount would be required to pay
Ans: . 216214

Solution
outstanding amount+additional purchase+interest
=110000+100000+6214
=216214