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Adam’s credit card calculates finance charges using the adjusted balance method and a 30-day billing cycle. The table below shows his use of that credit card over three months.

Date
Amount ($)
Transaction
4/1
626.45
Beginning balance
4/10
37.41
Purchase
4/12
44.50
Purchase
5/3
65.50
Payment
5/16
24.89
Purchase
5/20
104.77
Payment
6/6
23.60
Payment
6/10
15.00
Purchase
6/14
51.85
Purchase

If Adam’s credit card has an APR of 14.63%, what is Adam’s balance at the end of June?
a.
$629.42
b.
$629.66
c.
$627.27
d.
$628.40

Sagot :

Adam's balance at the end of June is $627.27

The adjusting balance method is used to determine the interest that would be paid by a credit card owner. The interest that would be paid is determined at the end of a period after all transactions have been adjusted for.

For example, if I have $100 in my credit card. If I buy a shoe worth $50 and deposit $20. My balance at the end of the month would be ($100 + $50 - $20) = $130.

Adam's balance can be determined by adding the amount he spent on purchases to the beginning balance and subtracting the payments he made.

$626.45 + $37.41 + $44.50 - $65.5 +$24.89 - $104.77 +$23.60 + $15 + $51.85 = $605.23

The balance at the end of the month would be the sum of the interest and the amount in his balance

Interest earned = balance x interest rate

Interest rate = 14.63% / 4 = 3.66%

Interest earned = $605.23 x 0.0366 = $22.14

Balance = $22.14 + $605.23 = $627.37

To learn more about the adjusting balance method, please check: https://brainly.com/question/2141275?referrer=searchResults

Answer:

C

Step-by-step explanation:

627.27. Just had it on my test

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