Answer :
The cash advance fee for the credit card account is $3.00
What is the basis for computing cash advance fee?
The basis for determining the cash advance fee is on the amount borrowed not that 2% is charged annually on the credit card account, in other words, the cash advance fee in this case is the cash advance multiplied by the advance fee of 2% as shown explicitly below:
cash advance fee=cash advance*cash advance fee %
cash advance=$150
cash advance %=2%
cash advance fee=$150*2%
cash advance fee=$3.00
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Full question:
Sidney took a $150 cash advance by using checks linked to her credit card account. The bank charges a 2 percent cash advance fee on the amount borrowed and offers no grace period on cash advances. Sidney paid the balance in full when the bill arrived.
What was the cash advance fee? (Round your answer to 2 decimal places.)
