Question

Everett 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 $3100. He then made a payment of $1900, so his balance decreased to $1200, and it remained that amount for the next 10 days, Everett then made a new purchase for $700. His balance for the last 10 days of the billing cycle was $1900. If his credit card's APR is 34% how much was Everett charged in interest for the billing cycle?

Answer 1

$33.53

Explanation:

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Answer 2

APR = Annual percentage Rate , which is the amount charged when you take loan from any institution

Starting Balance of 30 - Day billing Cycle = $ 3100

Payment made = $ 1900

Remaining Balance = $ 3100 - $ 1900

= $ 1200

Purchase Made = $ 700

New Balance = $ 1200 + $ 700

= $ 1900

Credit Card APR = 34% yearly=
`(34)/(12)`%

Interest charged for billing cycle = Remaining Balance in the account on last day ×Credit card APR

= 1900
`*(34)/(1200)`

= 19 × 2.8334(approx)

= $ 53.8346 (approx)= $54 →→[Interest for billing cycle]