Under the Two-Cycle Average Daily Balance Method for Computing Interest

question 12

Multiple Choice

Under the two-cycle average daily balance method for computing interest,

• A)there is a two-month grace period before any interest is owed on the unpaid balance.
• B)you will always pay more interest than under the one-cycle daily balance method.
• C)consumers who have a permanent unpaid balance will pay more interest than under the one-cycle daily balance method.
• D)a grace period applied in a previous month is eliminated if you fail to completely pay off the balance in the present month.