Respuesta :
Interest calculated using the previous balance method is LOWER than the average daily balance method when large payments are made during the month.
The previous balance method is an accounting method where interest charges are based on the amount owed at the end of the beginning of the billing cycle.
Interest calculated using the previous balance method is _Lower_ than the average daily balance method when large payments are made during the month.
What is previous balance method?
The previous balance method is an accounting method where interest charges are based on the amount owed at the end of the beginning of the billing cycle.
In average daily we consider balance interest or owed at the end of the day.
In order to calculate debt credit card we take the percentage of the total amount of current balance which will be termed as the interest then add one percent of the principal.
In order to calculate for daily credit card balance we total the balance in the billing cycle everyday then you will divide your total with the number of days which in the cycle.
Therefore, Interest calculated using the previous balance method is _Lower_ than the average daily balance method when large payments are made during the month.
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