Question

Use average daily balance method to answer the questions based on the information given.The account balance on April 1st is $50.51. On April 15th, a payment of $15.00 is made. What is the average daily balance for the account? What is the finance charge if the annual rate is 18%? What is the new account balance?Average daily balance is _________.Finance charge is _________.New balance __________.

Answer 1

1) Average daily balance= $1.00

2) Finance Charge= $11.1

New Balance= $ 24.41

Explanation:

1) Average daily balance is $15.00/ 15 days = $ 1.00

2) Finance Charge is calculated using the formula= $ 15 *18 *15/365= $ 11.1

New Balance : = $50.51- $ 15.00- $ 11.1= $ 24.41