Question

karl's credit card billing period ends on 10th of every month. the grace period is 20 days. During what period of time will he receive free credit for purchase made on July 25?

Answer 1

Solution:

Billing Period end on: 10th of every month

Grace Period: 20 days

If the purchase made on July 25, then the period of free credit for purchase is 36 days.

Explanation: It is given in the question that the billing period ends on 10th of every month, and if the purchase is made on 25th July then in such case the bill will be generated on 10th August (i.e. next billing date). Further, the grace period given is 20 days from the bill date, which means the due date will be 20 days after the billing date.

In the given case the billing date is 10th August, therefore the due date will be after 10th August plus 20 days i,e. 31st August.

Hence, the period of free credit for purchase is 36 days. (i,e. 6 days of July +10 days of August till billing date + 20 days of grace periods.)