Question

Begin by clearly stating the problem; you can copy this from the problem set file. Show how you solved the problem step by step, including any formulas or equations that you used. Finally, state your final answer in a complete sentence, and make sure that you include the correct units with you answer. Place both problem solutions in the same response.

1.)Raoul's credit card statement showed these transactions during May. May 1 Previous balance $304.29 May 6 Payment $100.00 May 10 Purchases $58.10 May 15 Payment $100.00 May 26 Purchases $114.73 The interest rate is 18% per month on the average daily balance. Find the average daily balance, the finance charge for the month, and the new balance on June 1. [Hint: Remember that May has 31 days.]

Answer 1

Answer: AVERAGE DAILY BALANCE = $59.11, FINANCE CHARGE FOR THE MONTH = $10.64, NEW BALANCE BY JUNE 1ST = $320.82

Step-by-step explanation: RAOUL'S CREDIT CARD BALANCE STATEMENT DURING THE MONTH is as follows:

MAY 1 - $304.29

MAY 6 - ($304.29 + $100) = $404.29

MAY 10 - ($404.29-$58.1) = $346.19

MAY 15 - ($346.19+$100) = $446.19

MAY 26 - ($446.19-$114.73) = $331.46

INTEREST RATE = 18% per month on the average daily balance (ADB) for that month

ADB= SUM OF THE DAILY BALANCES FOR THE 5 DAYS stated above, divided by 31 days in the month of May

ADB=1832.42 ÷ 31 = $59.11

Finance charge is 18% of $59.11 which is equal to $10.64

Balance by June 1st = (Balance on May 31st - Finance charge for May)

June 1st balance = $331.46 - $10.64 = $320.82