The credit card with the transactions described on the right uses the average da

Question

The credit card with the transactions described on the right uses the average daily balance method to calculate interest. The annual interest rate is 18% of the average daily balance. Calculate parts a-c using the statement on the right. Transaction Description Previous balance, $6310.00 Transaction Amount March 5 Payment March 7 Charge: Restaurant $60.00 March 12 Charge: Groceries 70.00 March 21 Charge: Car Repairs 240.00 $250.00 credit avment Due Date: April 9 a. Find the average daily balance for the biling period. Round to the nearest cent. The average daily balance for the billing period is S (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 $ (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.)

Explanation / Answer

The credit card with the transactions describe the right to uses the average   daily balance method to calculate interest The annual interest rate is 18 % of the average daily balance a) Calculating the average daily balance for the billing period : Date particulars Amount ( $) 1-Mar previous balance                     6,310 5-Mar Amount paid                     (250)                     6,060 7-Mar Restaurant Charges 60 12-Mar Groceries 70 21-Mar Car repairs                    240 31-Mar Outstanding Balance                     6,430 b) Calculation of interest to be paid on Apirl -1 : 31-Mar Outstanding Balance                     6,430 Interest rate p.a 18% Interest = 6430*18%*31/365 98.3 therefore interest to be paid on April -1st is $98.3 c) Calculation of balance due on April-1st : Outsatnding balance as on 31- march 6430 Add: Interest to be paid 98.3 Balance due on April-1st 6528.3

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.