Question

Find the Credit Card Interest. Assume that it takes 10 days for a payment to be received and it's a 30 day month.

Answer 1

The interest for each method will be:

• Previous Balance Method = $37.50
• Adjusted Balance Method = $36.88
• Average Daily Balance Method = $2966.67

How to calculate the interest?

The Previous Balance Method will be:

= PTR

= 3000 × (1/12) × 0.15

= $37.50

The Adjusted Balance Method will be:

P = 3000 - 50 = 2950

t = 1/12

r = 15% = 0.15

I = 2950 × (1/12) × 0.15

= $36.88

The Average Daily Balance Method will be:

= (3000 × 10) +(2950 × 20)/30

= 89000/30

= $2966.67

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