As of November 14, Ben has an outstanding credit card balance of $1,100 from purchases made over the past month. The new billing period begins on November 15. Assume Ben's outstanding balance for the first 15 days of this new billing period (Nov. 15-29) is $1,100. Then on November 29, the financial institution receives a payment of $600 from Ben, reducing his balance to $500. This is the balance for the remaining 15 days. Using the adjusted balance method and a monthly interest rate of 2.5%, Ben's finance charge would be

Question

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The adjusted balance method calculates interest on the balance remaining after payments are made. Ben's payment reduced his balance to $500 for half the month. The monthly interest rate of 2.5% applied to $500 results in a finance charge of $12.50.

As of November 14, Ben Has an Outstanding Credit Card