The rate of Interest and method used to compute finance charges The rate of Interest and estimated dollar amount of finance charges The method used to compute finance charges and estimated dollar amount of finance charges The interest rate on cash advances is generally the rate on purchases. The most common method that banks and retall credit card Issuers use to compute finance charges is the average dally balance (ADB) method. You expect to actively use your card. Which varlation of the ADB method will be least expensive for you? ADB excluding new purchases ADB Including new purchases It doesn't matter Consider the following case: On June 1, Lucla's credit card has a balance of $5,626.25. According to the terms of the card's lending agreement, an interest rate of 20% per year is assessed and the monthly finance charges are calculated using the Average Dally Balance (ADB) including purchases method. During the month, Lucla expects to make the purchases llsted below and will make a payment of $421.97 on June 24 , and has collected the following additional information: Use the following tabie to heip Lucia estimate her monthly interest charge for June. Use the following tabie to heip Lucia estimate her monthly interest charge for June. One way by which Lucla can increase her finance charges, everything else remaining constant, Is to: Make fewer, less expensive purchases. Make larger or more frequent payments. Buy a larger number of more expensive items using your card. The rate of Interest and method used to compute finance charges The rate of Interest and estimated dollar amount of finance charges The method used to compute finance charges and estimated dollar amount of finance charges The interest rate on cash advances is generally the rate on purchases. The most common method that banks and retall credit card Issuers use to compute finance charges is the average dally balance (ADB) method. You expect to actively use your card. Which varlation of the ADB method will be least expensive for you? ADB excluding new purchases ADB Including new purchases It doesn't matter Consider the following case: On June 1, Lucla's credit card has a balance of $5,626.25. According to the terms of the card's lending agreement, an interest rate of 20% per year is assessed and the monthly finance charges are calculated using the Average Dally Balance (ADB) including purchases method. During the month, Lucla expects to make the purchases llsted below and will make a payment of $421.97 on June 24 , and has collected the following additional information: Use the following tabie to heip Lucia estimate her monthly interest charge for June. Use the following tabie to heip Lucia estimate her monthly interest charge for June. One way by which Lucla can increase her finance charges, everything else remaining constant, Is to: Make fewer, less expensive purchases. Make larger or more frequent payments. Buy a larger number of more expensive items using your card
