Which of the following statements is correct?

Question

Quizplus · Accepted Answer

The average daily balance is calculated by adding up the balances on each day of the billing cycle and dividing by the number of days in the cycle. This is different from the average balance, which may take into account longer periods (such as the average balance over the course of a month). Option A is incorrect because open-end loans, such as lines of credit, allow for additional borrowing up to a certain amount. Option D is incorrect because open-end loans do not typically involve fixed dollar payments; instead, the payment amount varies based on the borrower's balance and interest rate.

Which of the Following Statements Is Correct