Question

CONCEPT CHECK Complete the problems, then check your answers at the end of the chayer. The finance charge is 1.5 percent of the average daily balance. Previous & Credits Dully Balance Charge $15.00 $180.00 $40.00 $30.00 6. Find the finance charge. Now 7. Find the new balance.​

Answer 1

The finance charge is calculated as 1.5% of the average daily balance.

From the example, the finance charge is $2.10, and the new balance after applying credits and finance charge is $142.10.

Step-by-step explanation:

To calculate the finance charge, we use the given percentage of 1.5% of the average daily balance.

Add the daily balances together and divide by the number of days to find the average.

Next, multiply the average daily balance by 1.5% or 0.015.

The new balance is found by adding the finance charge to the previous balance and subtracting any credits paid.

Example

Previous Balance: $180.00

Credits: $40.00

Average Daily Balance Calculation (assuming one day for simplicity): ($180.00 - $40.00) / 1 = $140.00

Finance Charge: $140.00 × 0.015 = $2.10

New Balance: $180.00 - $40.00 + $2.10 = $142.10