QuestionJune 2, 2025

Question 7 of 10 Armando 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 2500 He then made a payment of 1600 so his balance decreased to 900, and it remained that amount for the next 10 days Armando then made a purchase for 1300 so his balance for the last 10 days of the billing cycle was 2200 If his credit card's APR is 33% how much was Armando charged in interest for the billing cycle? A. 59.67 B. 35.26 C. 24.41 D. 67.81

Question 7 of 10 Armando 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 2500 He then made a payment of 1600 so his balance decreased to 900, and it remained that amount for the next 10 days Armando then made a purchase for 1300 so his balance for the last 10 days of the billing cycle was 2200 If his credit card's APR is 33% how much was Armando charged in interest for the billing cycle? A. 59.67 B. 35.26 C. 24.41 D. 67.81
Question 7 of 10 Armando 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 2500 He then made a payment of 1600 so his balance decreased to 900, and it remained that amount for the next 10 days Armando then made a purchase for 1300 so his balance for the last 10 days of the billing cycle was 2200 If his credit card's APR is 33% how much was Armando charged in interest for the billing cycle? A. 59.67 B. 35.26 C. 24.41 D. 67.81

Solution
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Answer

\50.57 Explanation 1. Calculate Average Daily Balance For the first 10 days, balance = 2500. For the next 10 days, balance = 900. For the last 10 days, balance = 2200. Average daily balance = \frac{(2500 \times 10) + (900 \times 10) + (2200 \times 10)}{30} = \frac{56000}{30} = 1866.67. 2. Convert APR to Daily Rate Daily interest rate = \frac{33\%}{365} = 0.00090411. 3. Calculate Interest for Billing Cycle Interest = Average daily balance \times Daily interest rate \times Number of days = 1866.67 \times 0.00090411 \times 30 = 50.57.

Explanation

1. Calculate Average Daily Balance<br /> For the first 10 days, balance = $2500$. For the next 10 days, balance = $900$. For the last 10 days, balance = $2200$. Average daily balance = $\frac{(2500 \times 10) + (900 \times 10) + (2200 \times 10)}{30} = \frac{56000}{30} = 1866.67$.<br /><br />2. Convert APR to Daily Rate<br /> Daily interest rate = $\frac{33\%}{365} = 0.00090411$.<br /><br />3. Calculate Interest for Billing Cycle<br /> Interest = Average daily balance $\times$ Daily interest rate $\times$ Number of days = $1866.67 \times 0.00090411 \times 30 = 50.57$.
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