Use the Average Daily Balance Method to Compute the Amount

question 77

Multiple Choice

Use the average daily balance method to compute the amount of interest that will be charged at the end of the billing
cycle. Use a 365-day year.
-Month: May (31 days) Previous month's balance: $960
Interest rate: 19%

• A) $7.88
• B) $12.35
• C) $11.31
• D) $8.76

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Definitions:

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to taxation, meaning that taxpayers pay the same percentage of their income in taxes regardless of how much they earn.

Regressive Tax

A tax that takes a larger percentage of income from low-income earners than from high-income earners, essentially burdening the poor more than the rich.

Proportional Tax

A proportional tax is a tax system where the tax rate remains constant regardless of the amount subject to taxation, meaning individuals pay the same percentage of their income regardless of income level.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting those with lower income.