Question 7 • FowU - Financial Math - B
The previous balance method uses the November 1 balance: $1,998.11 × (13.59% ÷ 12) ≈ $22.63. For the daily balance method, the balances are $1,998.11 for 4 days, $2,041.97 for 11 days, $1,816.97 for 7 days, and $1,878.18 for 8 days. Their 30-day average is about $1,939.94, giving a finance charge of about $21.67 using the daily rate. The previous balance method is therefore about $0.96 greater, matching choice C.
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