Question

Question 1 of 10 Lana has a credit card that uses the adjusted balance method. For the first 10 days of one of her 30-day billing cycles, her balance was $2800. She then made a payment of $1200, so her balance decreased to 1600, and it remained that amount for the next 10 days. Lana then made a purchase for 500, so her balance for the last 10 days of the billing cycle was $2100. If her credit card's APR is 35%, how much was Lana charged in interest for the billing cycle? A. $46.03 B. $80.55 C. $60.41 D. $14.38​

Answer 1

A. $46.03.

Explanation:

To calculate the interest charged for the billing cycle, we'll need to determine the average daily balance and then apply the APR. Here's a step-by-step explanation:

1. Calculate the number of days with each balance:

- $2800 balance for 10 days

- $1600 balance for 10 days

- $2100 balance for 10 days

2. Calculate the average daily balance:

- ($2800 * 10) + ($1600 * 10) + ($2100 * 10) / 30 = $1833.33

3. Calculate the interest charged using the APR:

- $1833.33 * 35% * (30/365) = $46.03

Therefore, Lana was charged $46.03 in interest for the billing cycle.