Answer: To calculate the finance charge, we need to multiply the principal amount by the percentage rate expressed as a decimal. In this case, Mike's finance charge is computed at 2% of $4.586.
First, we need to convert 2% to a decimal by dividing it by 100:
2% ÷ 100 = 0.02
Next, we can multiply the principal amount by the decimal percentage rate to find the finance charge:
$4.586 x 0.02 = $0.09172 (rounded to 2 decimal places)
Therefore, the finance charge on Mike's account is $0.09172.
Explanation: