Answer:
The first step is to calculate the average daily balance for the billing cycle. This is done by adding up the daily balances for each day of the billing cycle and then dividing by the number of days in the billing cycle. In this case, the billing cycle is from July 7 to August 6, so there are 31 days in the billing cycle.
The daily balances are as follows:
* July 7: $216.71
* July 14: $268.75
* July 17: $284.37
* July 21: $116.71
* July 24: $260.74
The average daily balance is therefore $226.81.
The next step is to calculate the finance charge. This is done by multiplying the average daily balance by the interest rate and then by the number of days in the billing cycle. In this case, the interest rate is 1.25% and the number of days in the billing cycle is 31 days.
The finance charge is therefore $7.43.
The final step is to calculate the new balance. This is done by adding the finance charge to the previous balance. In this case, the previous balance is $216.71 and the finance charge is $7.43. The new balance is therefore $224.14.
Here is the solution in mathematical form:
* Average daily balance = (216.71 + 268.75 + 284.37 + 116.71 + 260.74) / 31 = 226.81
* Finance charge = 226.81 * 0.0125 * 31 = 7.43
* New balance = 216.71 + 7.43 = 224.14
Explanation: