Question

MS ISL. 13 PLS DU For the credit card account, assume one month between billing dates (with the appropriate number of days) and interest of 15% per month on the average daily balance. Find (a) the average daily balance. (b) the monthly financ charge, and (c) the account balance for the next billing Previous Balance 5779.55 July 8 Billing Date July 18 Payment $300 July 27 Lunch S45 36 August 4 Concert tickets $89.86 (a) The average daily balance is (Round to the nearest cent as needed.) (b) The finance charge is 5 (Round to the nearest cent as needed.) (c) The account balance for the next billing is 5 (Round to the nearest cent as needed.) Activate Windows Enter your answer in each of the answer boxes.

Answer 1

Date	Opening Balance	Add (Expenses)	Less (Payments)	Running Balance	Number of days until Balanced Changed	Running Balance x Number of Days
July 8 - July 17	$779.55	-	-	$779.55	10	$7795.5
July 18- July 26	$779.55		$300	$479.55	9	$4315.95
July 27 - August 3	$479.55	$45.36		$524.91	8	$4199.28
August 4 - August 7 (End of Month Cycle)	$524.91	$89.86		$614.77	4	$2459.08
					31	$18769.81

Note :

1. Running Balance is equal to Opening Balance Plus expenses or minus payments to credit card
2. Month Cycle is of 31 days due to july month (31 days)

a)

Average Daily Balance = Sum of Daily Balance / Days in billing Period
                                     = $18769.81 / 31
                                     = $605.48

b)

Finance Charge = Average Daily Balance x Monthly Interest Rate
                         = $605.48 x 1.5%
                         = $9.08

c)

Account Balance for Next Billing Cycle = Latest Running Balance + Finance Change
                                                            = $614.77 + $9.08
                                                            = $623.85