The most expensive method for determining finance charges on revolving credit would be the:
A)average daily balance (ADB)method including new purchases.
B)average daily balance (ADB)method excluding new purchases.
C)annual percentage rate (APR)method including new purchases.
D)annual percentage rate (APR)method excluding new purchases.
E)annual percentage rate (APR)method excluding new purchases for student cards.

Question

Quizplus · Accepted Answer

The average daily balance (ADB) method including new purchases tends to be the most expensive for determining finance charges on revolving credit. This is because it calculates interest charges based on the average balance over the billing cycle, including new purchases, which can increase the amount of interest charged compared to methods that exclude new purchases or calculate interest differently.

The Most Expensive Method for Determining Finance Charges on Revolving