Finance Charges Answers

Gregory has a credit card with a 30-day billing cycle and an APR of 11.95%. The following table shows Gregory’s credit card transactions for the month of April.DateAmount ($)Transaction4/1622.82Beginning balance4/445.45Payment4/1078.91Purchase4/2516.36PurchaseBetween the adjusted balance method and the daily balance method, which method of computing Gregory’s April finance charge will result in a greater finance charge, and how much greater will it be?

Freida’s credit card has an APR of 13.73%, and it calculates her finance charge by using the daily balance method and a 30-day billing cycle. On September 1st, Freida had a balance of $449.22. During the month of September, she made a payment of $85.33 and a purchase of $60.99. How much greater will her September finance charge be if the purchase occurred on September 7th and the payment occurred on September 20th than it would be if the payment occurred on September 7th and the purchase occurred on September 20th?

Andrew is on a 30-day billing cycle. His credit card has an APR of 16.60% and computes finance charges using the previous balance method. The table below shows transactions that Andrew made in March. Based on the information in the table, what will Andrew’s March finance charge be?DateAmount ($)Transaction3/11,794.30Beginning balance3/6440.15Purchase3/935.65Purchase3/22250.00Payment3/2551.71Purchase

Yolanda’s credit card has an APR of 16.22% and a billing cycle of 30 days. The table below shows her transactions with that credit card in the month of November.DateAmount ($)Transaction11/1857.14Beginning balance11/376.95Purchase11/1050.00Payment11/2443.19PurchaseFind Yolanda’s finance charge in November using the previous balance method, the adjusted balance method, and the daily balance method. Among those three possible finance charges, what is the value of the one which is neither lowest nor highest?

Ruth’s credit card has an APR of 10.91%, and it computes finance charges using the previous balance method on a 30-day billing cycle. During the April billing cycle, she made a $45.17 payment on April 10th and a $88.34 purchase on April 17th. Her total at the start of May was $847.64. What was her balance at the beginning of April?

Which method of calculating finance charge results in the lowest finance charge?

To minimize finance charges calculated by the daily balance method, when in the billing cycle is it best to make purchases and payments?

Jessica’s credit card is on a 30-day billing cycle, and it computes finance charges using the adjusted balance method. The following table details Jessica’s use of her credit card in the month of October.DateAmount ($)Transaction10/11,240.55Beginning balance10/236.43Purchase10/1075.00Payment10/13131.79Payment10/2041.52Purchase10/2225.00PurchaseWhat is Jessica’s adjusted balance for October?

Adam’s credit card calculates finance charges using the adjusted balance method and a 30-day billing cycle. The table below shows his use of that credit card over three months.DateAmount ($)Transaction4/1626.45Beginning balance4/1037.41Purchase4/1244.50Purchase5/365.50Payment5/1624.89Purchase5/20104.77Payment6/623.60Payment6/1015.00Purchase6/1451.85PurchaseIf Adam’s credit card has an APR of 14.63%, what is Adam’s balance at the end of June?

Abby has a credit card which uses the adjusted balance method to compute finance charges. Her card has an APR of 11.83%, and she is on a 30-day billing cycle. The table below shows her transactions in the month of January.DateAmount ($)Transaction1/1722.10Beginning balance1/618.12Purchase1/765.00Payment1/1418.00Purchase1/2044.79Purchase1/2334.25Purchase1/2740.00PaymentWhat will Abby’s January finance charge be?

Patrick has a credit card with an APR of 15.40% and a billing cycle of 30 days. The following table shows Patrick’s credit card transactions in the month of August.DateAmount ($)Transaction8/11,466.22Beginning balance8/628.48Purchase8/9150.00Payment8/17115.75Payment8/2040.00Purchase8/2231.76PurchaseHow much greater will Patrick’s August finance charge be if his credit card company computes finance charges using the previous balance method than if it computes finance charges using the adjusted balance method?

Yvonne's credit card has an APR of 17.79% and a 30-day billing cycle. The following table details her credit card transactions in the month of June.DateAmount ($)Transaction6/1925.43Beginning balance6/762.74Payment6/1128.27Purchase6/2150.00PurchaseBetween the previous balance method and the daily balance method, which method of calculating Yvonne's June finance charge will result in a greater finance charge, and how much greater will it be?

How is the daily balance method different from compounding interest daily?

Calvin’s credit card computes finance charges using the daily balance method. His card has a billing cycle of 30 days and an APR of 14.75%. The following table details Calvin’s transactions in the month of September.DateAmount ($)Transaction9/1716.54Beginning balance9/784.94Purchase9/1215.69Purchase9/20200.00PaymentWhat will Calvin’s starting balance be next month?

Which of these is not a method used to calculate finance charges?

Yolanda’s credit card has an APR of 16.22% and a billing cycle of 30 days. The table below shows her transactions with that credit card in the month of November.DateAmount ($)Transaction11/1857.14Beginning balance11/376.95Purchase11/1050.00Payment11/2443.19PurchaseFind Yolanda’s finance charge in November using the previous balance method, the adjusted balance method, and the daily balance method. Among those three possible finance charges, what is the value of the one which is neither lowest nor highest?

How is the daily balance method different from compounding interest daily?

Dennis has a credit card with an APR of 10.14% and a billing cycle of 30 days. The following table shows his transactions with that credit card in the month of November.DateAmount ($)Transaction11/1517.87Beginning balance11/931.63Purchase11/2364.10Purchase11/2665.75PaymentIf the finance charge for November is $3.82, which method of calculating the finance charge does Dennis’s credit card company use?

Yvonne's credit card has an APR of 17.79% and a 30-day billing cycle. The following table details her credit card transactions in the month of June.DateAmount ($)Transaction6/1925.43Beginning balance6/762.74Payment6/1128.27Purchase6/2150.00PurchaseBetween the previous balance method and the daily balance method, which method of calculating Yvonne's June finance charge will result in a greater finance charge, and how much greater will it be?

Calvin’s credit card computes finance charges using the daily balance method. His card has a billing cycle of 30 days and an APR of 14.75%. The following table details Calvin’s transactions in the month of September.DateAmount ($)Transaction9/1716.54Beginning balance9/784.94Purchase9/1215.69Purchase9/20200.00PaymentWhat will Calvin’s starting balance be next month?