The credit card with the transactions described on the right Previous balance, $

Question

The credit card with the transactions described on the right Previous balance, $6340.00 uses the average daily balance method to calculate interest. The monthly interest rate is 2.5% of the average daily balance. Calculate parts a-d using the statement on the right ransaction Description ransaction Amount arch 1 Bill arch 5 Payment arch 7 Charge: Restaurant 550.00 arch 12 Charge: Groceries arch 21 Charge: Car Repairs 5210.00 5300.00 credit arch 31 End of billing period ayment Due Date: April 9 a. Find the average daily balance for the billing period. Round to the nearest cent. The average daily balance for the billing period is $ Round to the nearest cent as needed.) b. Find the interest to be paid on April 1, the next billing date. Round to the nearest cent. The interest to be paid on April 1 is S (Use the answer from part a to find this answer. Round to the nearest cent as needed.) c. Find the balance due on April 1 The balance due on April 1 is $ (Use the answer from part b to find this answer) Enter your answer in each of the answer boxes

Explanation / Answer

Solution:- Calculation of average daily balance Date Transactions Amount Balance O/s Days Product A B C=A*B Mar-01 Previous balance - $6,340.00 4 $25,360.00 Mar-05 Payment -$300.00 $6,040.00 2 $12,080.00 Mar-07 Charges-Restaurant $50.00 $6,090.00 5 $30,450.00 Mar-12 Charge-Groceries $100.00 $6,190.00 9 $55,710.00 Mar-21 Charge-car repairs $210.00 $6,400.00 11 $70,400.00 Total 31 $194,000.00 a) Average daily balance = Total product balance/Billing cycle =$194,000/31 =$6258.06 b) Interest charge = Average daily balance*2.5% =$6,258.06*2.5% =$156.45 c) The balance due on April 1 = $6400.00 Please feel free to ask if you have any query in the comment section.

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