Flashcard Review: Average daily balance

Front

Financially savvy people take advantage of the grace period on major purchases and pay the balance off in​ full; thus avoiding finance charges.

Back

True

Front

Typically, the credit card issuer allows you a grace​ period, which means

Back

you are not charged any interest during this grace period and you must pay your balance off in full to benefit from the grace period.

Front

What will your average daily balance be at the end of a 31−day month if your daily balance for the first 10 days was​ $1,400, for the next 10 days was​ $1900, and for the last 10 days was​ $2700?

Back

$1935.48

Front

Assuming the APR on your credit card is​ 18% and your average daily balance this month was​ $10,000, what will your interest or finance charges for the month​ be?

Back

$150

Front

The _________ method is the method of computing the finance charge on a credit account based on the average of the account balance at the end of each day of the billing period.

Back

average daily balance

Front

The _______ is the interest that is charged to a credit account if the account holder does not pay off the balance in full.

Back

finance charge

Front

Mary’s average daily balance for last month was $750. The finance charge was $12.24. What was the APR?

Back

19.6%

Front

Hannah did not pay her American Express credit card bill in full in May. Her June bill showed a finance charge, and she wants to see whether or not it is correct. The average daily balance is $1,359.25, and the APR is 22.2%. Find the finance charge for her June statement.

Back

$25.15

Front

What should Ralph’s finance charge be if the average daily balance is $470 and the monthly periodic rate is 1.5%?

Back

$7.05

Front

If the sum of the daily balances of a credit card totals $3,865.50 over 30 days, what is the average daily balance?

Back

$128.85