If creditors give you no credit for payments made during the billing period, this is called the:
A. APR method.
B. discount method.
C. previous balance method.
D. adjusted balance method.
My choice is A, but Im a little confused.
I don't think any of these answers is correct.
I don't either, but I have to pick one. Which one do you think would be the best answer?
You do not have to pick one. Tell your instructor that this question has an error. If your school and instructor are worth their money, they'll exempt this question -- or give you credit for any answer.
I see a lot of erroneous questions and answer choices from online for-profit schools.
Previous billing method
Previous balance method.
The correct answer is C. previous balance method.
To understand why, let's break down the different options:
A. APR method: The Annual Percentage Rate (APR) refers to the interest rate charged on a credit card. It does not specifically pertain to giving credit for payments made during a billing period.
B. discount method: The discount method is not related to giving credit for payments made during a billing period. It usually refers to receiving a reduction in the purchase price by applying a discount or coupon.
C. previous balance method: This method calculates the finance charges based on the outstanding balance at the end of the previous billing period, without considering any payments or purchases made during the current billing cycle.
D. adjusted balance method: This method takes into account the payments made during the billing period and subtracts them from the outstanding balance at the start of the billing period before calculating finance charges.
Given the information provided, the correct answer is C. previous balance method, as it does not give credit for payments made during the billing period.