Question

Use the average daily balance method to compute the finance charge on the credit card account

for the month of August (31 days). The starting balance from the previous month is $270. The
transactions on the account for the month are given in the table to the right. Assume an annual
interest rate of 19% on the account and that the billing date is August 1st.

aug 7th. payment of $70
aug. 10 purchase of $135
aug. 15 purchase of $20
aug. 29 purchase of $25


what is the finance charge for the month of August?

Answer 1

Answer: The finance charge on the account for the month of

August is calculated using the average daily balance method. The starting balance from the previous month is $270. During August, there were payments of $70 and purchases of $135, $20, and $25. The average daily balance for August is calculated by adding the balances at the end of each day and then dividing the total by the number of days in August (31). The finance charge for August