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A credit card company is in business to make a profit. How do you think they make a profit from their customers?
Do you think a credit card company would rather use the Previous Balance method to compute finance charges or the Unpaid Balance method? Why?
Make up an example in which you give
Using your numbers above, calculate the interest and new balance using both methods. Show your work! Then decide which method would be best for the consumer. Which method would be most profitable for the credit card company?
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