Question

Average Daily Balance: Most credit cards charge interest based on the average daily balance per billing cycle. In this case, each balance within the billing cycle is weighted by the number of days it exists. Suppose your credit card has a 30 day billing cycle and the balance for the next 30 days is given in the table below:

		balance	# days
Days	Transaction	(x)	(w)
1−7	remaining balance	$1200	7
8−13	$150 purchase	$1350	6
14−22	$250 purchase	$1600	9
23−30	$800 payment	$800	8

Round your answer to the nearest whole dollar.
The average daily balance is $  .

Answer 1

Answer

Total Balance = balance for the given days x number of days the balance remained

1200 * 7 + 1350 * 6 + 1600 * 9 + 800 * 8 = $37,300

Average Daily Balance = $ 37,300/ 30 = $ 1,243.33