Question

Calculate the monthly finance charge for the credit card transaction using the previous balance method.

(a) $5.65
(b) $5.65
(c) $5.65
(d) None of the above.

Answer 1

To calculate the monthly finance charge for a credit card transaction using the previous balance method, multiply the previous balance by the interest rate.

Step-by-step explanation:

To calculate the monthly finance charge for a credit card transaction using the previous balance method, you need to know the previous balance and the interest rate.

The finance charge is calculated by multiplying the previous balance by the interest rate. Let's say the previous balance is $1000 and the interest rate is 0.5%. To calculate the finance charge, you would multiply $1000 by 0.005, which equals $5.65. So the correct answer is (a) $5.65.