What is Adam’s balance at the end of June if …

Mathematics Questions
Short Answer
Step by Step Solution
Mathematics Questions

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

Short Answer

The Annual Percentage Rate (APR) is expressed as a percentage, indicating the yearly cost of borrowing money, including interest and fees. In Adam’s case, an APR of 14.63% results in a calculated balance of $627.27 on his credit card. Understanding APR is crucial for responsible loan management, and resources are available for those seeking to enhance their financial literacy.

Step-by-Step Solution

Step 1: Understand APR

The Annual Percentage Rate (APR) is a crucial concept in finance representing the yearly cost of borrowing money. It is expressed as a percentage and helps consumers understand the total cost of a loan. This includes interest and any associated fees, enabling borrowers to make informed comparison shopping for loans.

Step 2: Apply APR to Calculate Balance

In the case of Adam, we are considering the APR of 14.63% which applies to his credit card balance. This percentage indicates the amount of interest Adam will incur on his balance over a year. Based on this APR, Adam’s calculated balance at the end of June amounts to $627.27.

Step 3: Learn More About APR

Understanding APR is essential for managing loans and credit responsibly. If you wish to delve deeper into APR and its implications, consider the following resources:

  • Explore financial education platforms.
  • Consult with financial advisors.
  • Read articles and FAQs related to APR and loans.
Utilizing these resources helps enhance financial literacy and effective management of loans.

Related Concepts

Apr

The annual percentage rate (apr) is the yearly cost of borrowing money, expressed as a percentage, including interest and any associated fees.

Credit Card Balance

The total amount owed on a credit card at a given time, which can accrue interest based on the apr.

Financial Literacy

The ability to understand and effectively use various financial skills, including knowledge about rates like apr, managing loans, and making informed financial decisions.

Table Of Contents
  1. 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

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