Cecil has a credit card that uses the adjusted balance method. For the first 10 days of one of his 30-day billing cycles, his balance was $340. He then made a purchase for $290, so his balance jumped to $630, and it remained that amount for the next 10 days. Cecil then made a payment of $150, so his balance for the last 10 days of the billing cycle was $480. If his credit card's APR is 19%, which of these expressions could be used to calculate the amount Cecil was charged in interest for the billing cycle?

Question

Business

Cohen Henry

10 November, 13:37

Cecil has a credit card that uses the adjusted balance method. For the first 10 days of one of his 30-day billing cycles, his balance was $340. He then made a purchase for $290, so his balance jumped to $630, and it remained that amount for the next 10 days. Cecil then made a payment of $150, so his balance for the last 10 days of the billing cycle was $480. If his credit card's APR is 19%, which of these expressions could be used to calculate the amount Cecil was charged in interest for the billing cycle?

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Answers (1)

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Leandro Lambert · Answer 1

To calculate the amount of interest that Cecil was charged we can use the following formula:

interest charged = (APR / 365) x 30 days x adjusted balance

where:

Adjusted balance = previous balance - current payments = $340 - $150 = $190

interest charged = (19% / 365) x 30 x $190 = $2.97