A credit card calculates interest using the average daily balance method. The ca

Question

A credit card calculates interest using the average daily balance method. The card charges 23.4% annual interest rate on the average daily balance. The following transactions occurred during the March 1 - March 31 billing period. Transaction Description Transaction Amount Previous balance.$6310.00 March 1 Billing date March 5 Payment $400.00 credit March 7 Charge Restaurant $60.00 March 12 Charge Groceries $90.00 March 21 Charge Car Repairs $230.00 March 11 End of billing period Payment Due Date April 9 Find the average daily balance for the billing period. Round to the nearest cent.

Explanation / Answer

Average daily balance = $(6310+400+60+90+230)/31

=$228.71

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