Question

ONIE

6. Given the fact that a credit card balance
best describes how interest is calculated?
a.
B.
38-2 change every day, which of the following
C.
d.
Interest is calculated yearly using the total amount spent that year.
Interest is calculated monthly but only on the carry-over balances.
Interest is calculated monthly using the total amount spent that month.
Interest is calculated using average daily balances.

Answer 1

Answer: (D) - Interest is calculated using average daily balances.

Step-by-step explanation: Credit card companies typically calculate interest using the average daily balance method. This method takes the sum of the outstanding balance at the end of each day in the billing cycle and divides it by the number of days in the cycle to get the average daily balance. The interest is then calculated based on this average daily balance.