Final answer:
The student's question involves calculating the average daily balance, finance charge, and new balance on a credit card statement using an 18% APR. The process requires multiplying each period's balance by the days it was held, summing this up, and dividing by the total days in the billing cycle.
Step-by-step explanation:
The student is asking to calculate the average daily balance, finance charge, and the new balance for Cody Lind's credit card, given a series of transactions and an APR (Annual Percentage Rate) of 18%. To find the average daily balance, we must multiply the balance for each period by the number of days that balance was maintained, add these amounts together, and then divide by the total number of days in the billing cycle.
To calculate Cody's finance charge using the average daily balance method at an 18% APR, the formula is:
"(average daily balance * APR) / 365 * number of days in the billing cycle".
Lastly, to get the new balance, you add the finance charge to the starting balance and then adjust for any transactions (payments or charges).
Step-by-Step Calculation
1. Calculate the average daily balance.
2. Apply the APR to find the finance charge.
3. Add the finance charge to the previous balance and adjust for any transactions.
By performing these steps, we can calculate Cody's new balance after accounting for the finance charges on the card.