Compute the average daily balance and finance charges for the following example: Annual percentage rate (APR)...
Compute the average daily balance and finance charges for the following example:
Annual percentage rate (APR) is 23.99% per year.
|
Beginning Balance |
Payments | Purchases | Ending Balance | |
| Due date | $2500 | $500 | $2000 | |
| 10 days after due date | $2000 | $200 | $1800 | |
| 20 days after due date | $1800 | $100 | $1700 | |
| 30 days after due date | $1700 | $1700 |
Please show all work and calculations. Thank you!
Homework Answers
Average Daily Balance = Weighted Average = Sum of (Balance*Days)/Total Days
Therefore, Average Daily Balance = [(2000*10)+(1800*10)+(1700*10) ]/30 = 1833.33
Finance Charges = Average Daly Balance*Interest Rate*Total Days/365
= 1833.33*0.2399*30/365 = 36.15(approx. Answer can differ slightly due to rounding)
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Compute the average daily balance and finance charges
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Register
Date
Transactions
Unpaid Balance
April 10
1389.21
April 11
April 12
April 13
April 14
April 15
April 16
April 17
April 18
April 19
April 20
April 21
April 22
April 23
April 24
April 25
April 26
April 27
April 28
April 29
April 30
May 1
May 2
May 3
May 4
May 5
May 6
May 7
May 8
May 9
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2. Calculate interest in November
3. What was the unpaid balance for November after interest is
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calculate the finance charge and the new balance for the month of
November.
5. The new balance for the month of November would be
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Register
Date
Transactions
Unpaid Balance
April 10
1389.21
April 11
April 12
April 13
April 14
April 15
April 16
April 17
April 18
April 19
April 20
April 21
April 22
April 23
April 24
April 25
April 26
April 27
April 28
April 29
April 30
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May 2
May 3
May 4
May 5
May 6
May 7
May 8
May 9
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Enter your answers in this column.
At the end...
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