Question

Calculate average daily balance and finance charge (29-day billing cycle beginning on 9/4) given: Finance charge is 2% of average daily balance

9/4       Balance        $500

9/13     Payment       20

9/19     Charge          100

Ave daily balance                  

Total finance charge:

Answer 1

Calculation of the average daily balance and finance charge
Date		Number of days	Daily Balance	Calculated Value
04-Sep	12-Sep	9	$500.00	$4,500.00
13-Sep	18-Sep	6	$480.00	$2,880.00
19-Sep	02-Oct	14	$580.00	$8,120.00
Total		29		$15,500.00
/ No.of days in billing cycle				29 days
Average Daily balance				$534.48
Finance charge [Average daily balance x 2%]				$10.69