Calculate the average daily balance and finance charge. (Round your answers to the nearest cent.)
| 30-day billing cycle | |||||||||||||
| 9/16 | Billing date | Previous balance | $ 2,000 | ||||||||||
| 9/19 | Payment | $ | 60 cr. | ||||||||||
| 9/30 | Charge: Home Depot | 1,500 | |||||||||||
| 10/3 | Payment | 60 cr. | |||||||||||
| 10/7 | Cash advance | 70 | |||||||||||
Finance charge is
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answer :
| Average daily balance $ | 4191 |
| Finance charge $ | 2.1 |
Working notes for the above answer is as under
To calculate your average daily balance you must total your balance from each day in the billing cycle (even the day’s that your balance didn’t change) and divide the total by the number of days in the cycle.
(Day 1 Balance + Day 2 Balance + Day 3 Balance…) / number of days in billing cycle
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Avg daily balance= $ 125730/30 days
