Question

A credit card account had a $236 balance on March 5. A purchase of $180 was...

A credit card account had a $236 balance on March 5. A purchase of $180 was made on March 12, and a payment of $175 was made on March 28. Find the average daily balance if the billing date is April 5. (Round your answer to the nearest cent.)

Homework Answers

Answer #1

COMPUTATION OF AVERAGE DAILY BALANCE

Average Daily Balance = Sum of the total amount owed each day of the month / Number of days in the billing period   

Date Payments or Purchases Balance each day Number of days until balance changes Unpaid balance times number of days
March 5 - March 11 $236 7 $1,652
March 12 - March 27 $180 $416 16 $6,656
March 28 - April 4 ($175) $241 8 $1,928
TOTAL 31 $10,236

Average Daily Balance = $10,236 / 31

   = $330.2

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