Question

January 1 Beginning balance January 8 Payment January 11 Purchase January 21 Payment Date Use the credit card statement to help fill in the table below. Note that there are 31 days in January. Also, a purchase increa a payment decreases the unpaid balance. rest, and balance for a credit... Transaction $2200.06 $370.00 $35.75 $800.00 January 1 Beginning balance January 8 Payment January 11 Purchase January 21 Payment xplanation Transaction amount Unpaid Number of days at that balance balance $2200.06 $2200.06 7 days (from January 1 through January 7) $370.00 $1830.06 $35.75 days (from January 8 through January 10) $800.00 10 days (from January 11 through January 20) 11 days (from January 21 through January 31) Total: 31 days S SO (b) Find the average daily balance. Write your answer to the nearest cent. (c) Suppose the credit card company charges an interest rate of 1.7% on the average daily balance for January found in part (b). How much interest will be charged? Write your answer to the nearest cent. Unpaid balance X Num of d $15,40C X Total: S​

Answer 1

The average daily balance for January is $1425.82, and the interest charged is $751.14.

Step-by-step explanation:

To find the average daily balance, you need to calculate the balance at the end of each day in January and then find the average of those balances.

Here's how:

1. On January 1, the balance is $2200.06.
2. On January 2, the balance is still $2200.06.
3. On January 3, the balance is still $2200.06.
4. On January 4, the balance is still $2200.06.
5. On January 5, the balance is still $2200.06.
6. On January 6, the balance is still $2200.06.
7. On January 7, the balance is still $2200.06.
8. On January 8, the balance is $1830.06 after a payment of $370.00.
9. On January 9, the balance is still $1830.06.
10. On January 10, the balance is still $1830.06.
11. On January 11, the balance is $1794.31 after a purchase of $35.75.
12. On January 12, the balance is still $1794.31.
13. On January 13, the balance is still $1794.31.
14. On January 14, the balance is still $1794.31.
15. On January 15, the balance is still $1794.31.
16. On January 16, the balance is still $1794.31.
17. On January 17, the balance is still $1794.31.
18. On January 18, the balance is still $1794.31.
19. On January 19, the balance is still $1794.31.
20. On January 20, the balance is still $1794.31.
21. On January 21, the balance is $994.31 after a payment of $800.00.
22. On January 22, the balance is still $994.31.
23. On January 23, the balance is still $994.31.
24. On January 24, the balance is still $994.31.
25. On January 25, the balance is still $994.31.
26. On January 26, the balance is still $994.31.
27. On January 27, the balance is still $994.31.
28. On January 28, the balance is still $994.31.
29. On January 29, the balance is still $994.31.
30. On January 30, the balance is still $994.31.
31. On January 31, the balance is still $994.31.

The sum of the daily balances is $44200.37, and the average daily balance is $44200.37 divided by 31, which equals $1425.82 (to the nearest cent).

To calculate the interest charged, you need to multiply the average daily balance by the interest rate and the number of days in the month:

Interest = Average Daily Balance * Interest Rate * Number of Days

In this case, the interest charged is $1425.82 * 0.017 * 31, which equals $751.14 (to the nearest cent).