The finance charge of a credit card is calculated by multiplying the periodic rate by the prior month's balance.

Question

The finance charge of a credit card is calculated by multiplying the periodic rate by the prior month's balance.​

Quizplus · Accepted Answer

The finance charge on a credit card is typically calculated by applying the periodic interest rate (which is the annual interest rate divided by the number of billing cycles in a year) to the account's balance from the previous billing cycle. This method is one of the common ways credit card issuers calculate the interest charges that are added to the cardholder's account.

The Finance Charge of a Credit Card Is Calculated by Multiplying