Question

Lowell 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 $1360. He then
made a purchase for $470, so his balance jumped to $1830, and it remained
that amount for the next 10 days. Lowell then made a payment of $740, so
his balance for the last 10 days of the billing cycle was $1090. If his credit
card's APR is 28%, which of these expressions could be used to calculate the
amount Lowell was charged in interest for the billing cycle?

Answer 1

Answer: (0.28/365 •30)(620)

Step-by-step explanation:

Answer 2

To calculate Lowell's credit card interest for the billing cycle using the adjusted balance method, we multiply each balance by the number of days it was held and sum them, then multiply by the daily interest rate (APR/360).

Step-by-step explanation:

Lowell has a credit card that charges interest using the adjusted balance method. During a 30-day billing cycle, he had different balances for three periods which we need to take into account to calculate the interest. For the first 10 days, his balance was $1360. After making a purchase, the balance became $1830 for the next 10 days. Finally, following a payment, the balance was $1090 for the last 10 days of the billing cycle.

To calculate the interest charged for this billing cycle, we can use the following formula: Interest = (Balance1 × Days1 + Balance2 × Days2 + Balance3 × Days3) × (APR / 360). Applying the balances and days, we get:

Interest = ($1360 × 10 + $1830 × 10 + $1090 × 10) × (0.28 / 360)

Therefore, the expression calculates how much interest Lowell was charged for the billing cycle at an APR of 28%.