Even before you use a new credit card, what information is the institution that issued your card required by law to disclose? o The rate of interest and method used to compute finance charges o The rate of interest and estimated dollar amount of finance charges o The method used to compute finance charges and estimated dollar amount of finance charges The interest rate on cash advances is generally The most common method that banks and retail credit card issuers use to compute finance charges is the average daily balance (ADB) method. You expect to actively use your card. Which variation of the ADB method will be least expensive for you? O ADB excluding new purchases O ADB including new purchases It doesn't matter Consider the following case: On June 1, Crystal'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 Daily Balance (ADB) including purchases method. During the month, Crystal expects to make the purchases listed below and will make a payment of $421.97 on June 24, and has collected the following additional information: Date Purchases June 8 $102.39 June 10 1,722.13 June 22 1,184.19 June 28 15.13 Additional Information Monthly interest rate Beginning card balance Days in the month the rate on purchases. 1.67% $5,626.25 30 Dates 6/2 - 6/8 6/9 - 6/10 6/11 - 6/22 6/23 - 6/24 6/25 - 6/28 6/29 - 6/1 Total Average Daily Balance With Purchases Finance Charge Use the following table to help Crystal estimate her monthly interest charge for June. Number of Days 7 2 12 2 4 3 30 Daily Balance $5,626.25 $ Calculated Value o Make fewer, less expensive purchases. O Buy a larger number of more expensive items using your card. o Make larger or more frequent payments. $ $ $ One way by which Crystal can increase her finance charges, everything else remaining constant, is to:
Even before you use a new credit card, what information is the institution that issued your card required by law to disclose? o The rate of interest and method used to compute finance charges o The rate of interest and estimated dollar amount of finance charges o The method used to compute finance charges and estimated dollar amount of finance charges The interest rate on cash advances is generally The most common method that banks and retail credit card issuers use to compute finance charges is the average daily balance (ADB) method. You expect to actively use your card. Which variation of the ADB method will be least expensive for you? O ADB excluding new purchases O ADB including new purchases It doesn't matter Consider the following case: On June 1, Crystal'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 Daily Balance (ADB) including purchases method. During the month, Crystal expects to make the purchases listed below and will make a payment of $421.97 on June 24, and has collected the following additional information: Date Purchases June 8 $102.39 June 10 1,722.13 June 22 1,184.19 June 28 15.13 Additional Information Monthly interest rate Beginning card balance Days in the month the rate on purchases. 1.67% $5,626.25 30 Dates 6/2 - 6/8 6/9 - 6/10 6/11 - 6/22 6/23 - 6/24 6/25 - 6/28 6/29 - 6/1 Total Average Daily Balance With Purchases Finance Charge Use the following table to help Crystal estimate her monthly interest charge for June. Number of Days 7 2 12 2 4 3 30 Daily Balance $5,626.25 $ Calculated Value o Make fewer, less expensive purchases. O Buy a larger number of more expensive items using your card. o Make larger or more frequent payments. $ $ $ One way by which Crystal can increase her finance charges, everything else remaining constant, is to:
Chapter9: Accounting For Receivables
Section: Chapter Questions
Problem 6TP: When a customer is delinquent on paying a notes receivable, your company has the option to continue...
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Question
Transcribed Image Text:Even before you use a new credit card, what information is the institution that issued your card
required by law to disclose?
o The rate of interest and method used to compute finance charges
o The rate of interest and estimated dollar amount of finance charges
o The method used to compute finance charges and estimated dollar amount of finance
charges
The interest rate on cash advances is generally
The most common method that banks and retail credit card issuers use to compute finance
charges is the average daily balance (ADB) method. You expect to actively use your card. Which
variation of the ADB method will be least expensive for you?
O ADB excluding new purchases
O ADB including new purchases
It doesn't matter
Consider the following case:
On June 1, Crystal'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 Daily Balance (ADB) including purchases method.
During the month, Crystal expects to make the purchases listed below and will make a payment of
$421.97 on June 24, and has collected the following additional information:
Date
Purchases
June 8
$102.39
June 10
1,722.13
June 22 1,184.19
June 28 15.13
Additional Information
Monthly interest rate
Beginning card balance
Days in the month
the rate on purchases.
1.67%
$5,626.25
30
Dates
6/2 - 6/8
6/9 - 6/10
6/11 - 6/22
6/23 - 6/24
6/25 - 6/28
6/29 - 6/1
Total
Average Daily Balance With
Purchases
Finance Charge
Use the following table to help Crystal estimate her monthly interest charge for June.
Number of
Days
7
2
12
2
4
3
30
Daily Balance
$5,626.25
$
Calculated Value
o Make fewer, less expensive purchases.
O Buy a larger number of more expensive items using your card.
o Make larger or more frequent payments.
$
$
$
One way by which Crystal can increase her finance charges, everything else remaining constant, is
to:
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