dennis has a credit card with an apr of 10.14% and a billing cycle of 30 days. the following table shows his…

dennis has a credit card with an apr of 10.14% and a billing cycle of 30 days. the following table shows his transactions with that credit card in the month of november.\n| date | amount ($) | transaction |\n| ---- | ---- | ---- |\n| 11/1 | 517.87 | beginning balance |\n| 11/9 | 31.63 | purchase |\n| 11/23 | 64.10 | purchase |\n| 11/26 | 65.75 | payment |\nif the finance charge for november is $3.82, which method of calculating the finance charge does denniss credit card company use?\n a. adjusted balance method\n b. previous balance method\n c. daily balance method\n d. there is not enough information to determine which method was used

dennis has a credit card with an apr of 10.14% and a billing cycle of 30 days. the following table shows his transactions with that credit card in the month of november.\n| date | amount ($) | transaction |\n| ---- | ---- | ---- |\n| 11/1 | 517.87 | beginning balance |\n| 11/9 | 31.63 | purchase |\n| 11/23 | 64.10 | purchase |\n| 11/26 | 65.75 | payment |\nif the finance charge for november is $3.82, which method of calculating the finance charge does denniss credit card company use?\n a. adjusted balance method\n b. previous balance method\n c. daily balance method\n d. there is not enough information to determine which method was used

Answer

Explanation:

Step1: Calculate finance - charge for previous balance method

The previous balance method uses the beginning balance to calculate the finance charge. The monthly interest rate $r=\frac{10.14%}{12}=0.00845$. The beginning balance is $B = 517.87$. The finance - charge $FC=B\times r=517.87\times0.00845 = 4.3760015\approx4.38$.

Step2: Calculate finance - charge for adjusted balance method

The adjusted balance is the beginning balance plus purchases minus payments. Purchases are $31.63 + 64.10=95.73$, and the payment is $65.75$. The adjusted balance $AB=517.87+95.73 - 65.75=547.85$. The finance - charge $FC = AB\times r=547.85\times0.00845=4.6393325\approx4.64$.

Step3: Analyze the given finance - charge

The given finance charge for November is $3.82$. Since we cannot calculate this value using the previous balance method or the adjusted balance method, and we have no information about daily - balance calculations, we conclude that there is not enough information to determine which method was used.

Answer:

d. there is not enough information to determine which method was used