Question

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. Date Amount ($) Transaction 10/1 1,240. 55 Beginning balance 10/2 36. 43 Purchase 10/10 75. 00 Payment 10/13 131. 79 Payment 10/20 41. 52 Purchase 10/22 25. 00 Purchase What is Jessica’s adjusted balance for October? a. $1,136. 71 b. $1,033. 76 c. $1,140. 55 d. $1,240. 55.

Answer 1

The adjusted balance of Jessica for the month of October is $ 1033.76. In this method, monthly payment is deducted from the unlock balance, and purchase is not included in the balance.

What is the adjusted balance method?

With the adjusted balance method, the credit card company starts with the balance from the end of the last payment cycle and withdraws any payments made, and adds any credits sent to the account during the current cycle.

In the given information, to calculate the adjusted balance we will deduct the payments made from the beginning balance and ignore the purchases made for the month:

$= \ \,1,240.55 - \ \,75.00 - \ \,131.79\\\\= \ \,1033.76$

Hence, The correct answer is Option B.

To learn more about adjusted balance method, refer to the link:

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