If a Credit Card Company Has a 30-Day Billing Period,20-Day

question 91

Multiple Choice

If a credit card company has a 30-day billing period,20-day grace period and an interest rate of 20 percent,how much interest will be charged on a $5000 average monthly balance which gets paid 40 days after the due date using the average daily balance method?

• A)$258.90
• B)$115.07
• C)$201.37
• D)$172.60

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Definitions:

Profitability

A measure of the ability of a company or a business sector to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time.

Employment

The state of having paid work, being engaged in an occupation or job.

Marginal Productivity

The additional output that is produced by using one more unit of a given input, while keeping other inputs constant.

Flood

An overflow of water that submerges land that is usually dry, often caused by heavy rain, melting snow, or breach in water containment systems.