Question

Cody Lind’s most recent credit card statement follows. His finance charge is 18% APR. Calculate Cody’s average daily balance, finance charge and new balance. (Round your final answers to the nearest cent.) 30-day billing cycle 9/2 Billing date $1,090 previous balance 9/7 Payment $300 cr. 9/13 Charge: Kohl’s $450 9/17 Payment $300 cr. 9/28 Charge: WalMart 105 Average daily balance $ Finance charge $ New balance $

Answer 1

Average Daily Balance: $1,090 x 5 Days = $5,450 ($1,090 - $300) = 790 x 6 days = $4,740 ($790 + $450) = $1,240 x 4 days = $4,960 ($1,240 - $300) = $940 x11 days = $10,340 ($940 + $105) = $1,045 x 4 days = $4,180 $5,450 + $4,740 + $4,960 + $10,340 + $4,180 = $29,670 $29,670 / 30 days = $989 Average Daily Balance: $989 Finance Charge: $29,670 x 18% = $5,340.60 30 x 12 = 360 $5,340.60 / 360 = 14.835 Finance Charge = $14.84 New Balance: $1,090 - $300 + $450 -$300 + $105 = $1,045 $1,045 + $14.84 = $1,059.84 New Balance: $1,059.84