Questions on Finance Charge

Topic : Finance Charge

Question 1 : With the __________ , interest is charged only on the balance remaining in your account. (a)Average daily balance method (b) Installment plans method (c)Unpaid balance method .
Answer :
a) Average Daily Balance Methodit is better for the customer to have an unpaid balance but credit cards usually use the Avg Daily balance method. Please keep in mind we have not used the concept of grace period here.

Question 2 : Interest is charged on the average daily balance on your charge card with the __________. (a)Average daily balance method (b)Unpaid balance method (c)Finance charge
Answer :
a)Average Daily Balance Method.

Question 3 : Lamont Laborde Average daily balance: $416.74 Monthly rate : 1.5% . Finance charge for month: __________
Answer :
$6.25 ( 416.74*1.5)/100

Hope the answer will be helpful for you.