Neither. Per Section 1026.14(b), you don't look at interest billed at all. The APR is determined by multiplying the periodic rate by the number of periods in a year. So the tolerance for this disclosure is really just whether you did your multiplication right. If the daily periodic rate is .027397%, the APR is 10.00% (or more accurately 9.9999%). The old "statement APR" that included non-interest finance charges and was calculated based on finance charges actually charged and account balances now only applies to HELOCs under 1026.7(a) and even then, it's optional.
Nobody's perfect, not even a perfect stranger.