Question

In one particular month, a person has a balance of $1,660 on their credit card for 10 days. They then make a purchase and carry a balance of $1,920 for the next 11 days. Then this person makes a payment and carries a balance of $1,850 for the remaining 10 days in the month. What is their average daily balance rounded to the nearest cent?

Answer 1

To calculate the average daily balance, add up the balances for each period and divide by the total number of days in the month. The average daily balance is $1,811.61.

Step-by-step explanation:

To calculate the average daily balance, we need to add up the balances for each period and divide by the total number of days in the month.

For the first period, the balance is $1,660 for 10 days, so the total balance for this period is 1,660*10 = $16,600.

For the second period, the balance is $1,920 for 11 days, so the total balance for this period is 1,920*11 = $21,120.

For the third period, the balance is $1,850 for 10 days, so the total balance for this period is 1,850*10 = $18,500.

The total balance for the month is $16,600 + $21,120 + $18,500 = $56,220.

The average daily balance is $56,220 divided by the total number of days in the month, which is 31. Therefore, the average daily balance is $56,220/31 = $1,811.61 (rounded to the nearest cent).