If creditors add finance charges after subtracting payments made during the billing period, this is called the
A)adjusted balance method.
B)discount method.
C)previous balance method.
D)APR method
E)average daily balance method.

Question

Quizplus · Accepted Answer

The adjusted balance method calculates finance charges by first subtracting payments made during the billing period from the balance owed, then adding the finance charges to the remaining balance. This method benefits consumers by reducing the balance on which interest is calculated if they make payments.

If Creditors Add Finance Charges After Subtracting Payments Made During