33 , $127.71127.71 Feb. 77 Charge: Art supplies $23.73 Feb. 12 Payment $90.00 Fe

Question

33 ,

$127.71127.71

Feb. 77

Charge: Art supplies

$23.73

Feb. 12

Payment

$90.00

Feb. 22

Charge: Flowers deliver

$74.28

Feb. 28

Charge: Music CD

$12.88

a) Find Carol Ann's average daily balance for the billing period from February 3 to Mach 3

Assume it is not a leap year.

b) Find the finance charge to be paid on March 3

c) Find the balance due on March 3

d) Compare the result obtained to those obtained using the previous balance method.

a) The average daily balance for the billing period was

$

(Round to the nearest cent as needed.)

b) The finance charge to be paid on March 3

is $

(Round to the nearest cent as needed.)

c) The balance due on March 3 is $

(Round to the nearest cent as needed.)

d) Using the previous balance method, the finance charge is $1.60 and the balance due is $150.20. How do the results obtained using the average daily balance method compare to those obtained using the previous balance method? Choose the correct answer below.

A.The results obtained using the average daily balance method are greater than those obtained using the previous balance method.

B.The results obtained using the average daily balance method are less than those obtained using the previous balance method.

C.The results obtained using the average daily balance method are equal to those obtained using the previous balance method.

Click to select your answer(s).

Explanation / Answer

Cl. Bal. day Bal      127.71      127.71 04-Feb      127.71 1 05-Feb      127.71 2 06-Feb      127.71 3 07-Feb         23.73      151.44 4 08-Feb      151.44 5 09-Feb      151.44 6 10-Feb      151.44 7 11-Feb      151.44 8 12-Feb      (90.00)         61.44 9 13-Feb         61.44 10 14-Feb         61.44 11 15-Feb         61.44 12 16-Feb         61.44 13 17-Feb         61.44 14 18-Feb         61.44 15 19-Feb         61.44 16 20-Feb         61.44 17 21-Feb         61.44 18 22-Feb         74.28      135.72 19 23-Feb      135.72 20 24-Feb      135.72 21 25-Feb      135.72 22 26-Feb      135.72 23 27-Feb      135.72 24 28-Feb         12.88      148.60 25 01-Mar      148.60 26 02-Mar      148.60 27 03-Mar      148.60 28 3163.45 Average Daily Balance=3163.45/28      112.98 Interest=112.98*1.25%           1.41 Balance Due on 3rd March Statement Balance      148.60 Finance Charge           1.41 Total Balance Due      150.01 F.C. under previous balance method 127.71*1.25%           1.60 Balance Due on 3rd March under previous balance method Statement Balance      148.60 Finance Charge           1.60 Total Balance Due      150.20 d Choice B is correct The results obtained using the average daily balance method are less than those obtained using the previous balance method.

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