Question

Days	Transaction	balance	# days
1-6	remaining balance	$1900	6
7-13	$400 purchase	$2300	7
14-17	$1000 purchase	$3300	4
18-30	$1500 payment	$1800	13

(a) Calculate the average daily balance for these 30 days.

(b) What would have been your average daily balance if you paid $1400 on day 15 instead of $1500 on day 18?

Answer 1

Answer :

(a.) Calculation of Average Daily Balance

Average Daily Balance = [(1900 * 6) + (2300 * 7) + (3300 * 4) + (1800 * 13) ] / 30

= [11400 + 16100 + 13200 + 23400] / 30

= 64100 / 30

= 2136.67

(b.) Average Daily Balance if  paid $1400 on day 15 instead of $1500 on day 18 (Number of days from 15 - 30 is 16 days)

Average Daily Balance = {(1900 * 6) + (2300 * 7) + (3300 * 4) +[(3300 - 1400)] * 16 } / 30

= {11400 + 16100 + 13200 + 30400] / 30

= 71100 / 30

= 2370