Question

June credit card: 6/4-6/17 end-of-day balance = $200 x 14 days = $2,800 sum of balances, 6/18 a payment of $45 was made to have an end-of-day balance = $155 x 1 day = $155 sum of balances, 6/19-7/3 $155 end-of-day balance x 14 days = $2,325 sum of balances, total days = 30. Find the average daily balance, no new purchases included.

Options:
Option 1: $171.83
Option 2: $175.33
Option 3: $178.55
Option 4: $182.10

Answer 1

The average daily balance is $1,285.67.

Step-by-step explanation:

To find the average daily balance, we need to calculate the sum of balances for each day and divide it by the total number of days.

First, we calculate the sum of balances for the first period: $200 x 14 days = $2,800.

Next, we calculate the remaining balance after the payment: $2,800 - $45 = $2,755.

Then, we calculate the sum of balances for the second period: $2,755 x 14 days = $38,570.

Finally, we divide the total sum of balances by the total number of days: $38,570 / 30 days = $1,285.67.

Therefore, the average daily balance is $1,285.67.