Finance Charges Answers

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?

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?

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?

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

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

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?

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

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?

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?

Laura’s credit card has an APR of 12.04%, and it computes finance charges using the daily balance method and a 30-day billing cycle. On June 1st, Laura had a balance of $606.40. She made exactly one transaction in June: a payment of $55.25. If Laura’s finance charge for June was $5.71, on which day did she make the payment?