Question

The balance on Ramon Felipe's credit card on January 14, his billing date, was $288.37. For the period ending February 14, Ramon had the following transactions to the right a) Find the average daily balance for the billing period b) Find the finance charge to be paid on February 14. Assume an interest rate of 12% per month. c) Find the balance due on February 14 January 16 Charge: $37.59 Restaurant meal January 17 Payment February 2 Charge: $180.00 $53.07 Lawn ornaments February 4 Charge: $160.13 Microwave oven a) The average daily balance for the billing period was $ (Round to the nearest cent as needed )

Answer 1

1. Average daily balance is the average of the monthly expenses.

The balance of Jan 15- Feb 14 are:

Date	Balance	total amount
Jan-15	288.37	288.37
Jan-16	288.37+37.59= 325.96	325.96
Jan-17	325.96+180= 505.96	505.96
jan 18-feb 1	505.96	7589.4
feb 2-3	505.96+53.07= 559.03	1118.06
Feb 4-Feb 14	559.03+160.13= 719.16	7910.76
		17738.51

The total balance is calculated by multiplying the number of days for which the balance was so. For example, for Jan 18-Feb 1, its 15 days

So the total balance used is, 505.96*15= 7589.40 and so on

Now the average daily balance = 17738.51/31= 572.21

2. Interest charges = 572.21*1.2% = $6.87
3. Balance due on Feb 14- $719.16