tao used his new credit card to buy a $500 video game system. the credit card charged 10 percent interest…

tao used his new credit card to buy a $500 video game system. the credit card charged 10 percent interest each billing cycle. tao pays the $500 balance before his first statement arrives. how much does tao still owe the company? a. nothing; no interest is charged if the card is paid before the first billing cycle. b. he owes $50, which is 10 percent of $500. c. it depends on how many days he took to make the payment. d. he owes $55, which includes the initial interest and the compounded interest.

tao used his new credit card to buy a $500 video game system. the credit card charged 10 percent interest each billing cycle. tao pays the $500 balance before his first statement arrives. how much does tao still owe the company? a. nothing; no interest is charged if the card is paid before the first billing cycle. b. he owes $50, which is 10 percent of $500. c. it depends on how many days he took to make the payment. d. he owes $55, which includes the initial interest and the compounded interest.

Answer

Explanation:

Step1: Analyze credit - card interest rule

Credit - card interest is charged per billing cycle.

Step2: Check payment timing

Tao pays the $500 balance before his first statement (first billing cycle) arrives.

Answer:

A. Nothing; no interest is charged if the card is paid before the first billing cycle.