For the credit card account assume one month between billing

For the credit card account assume one month between billing (with the appropriate number of days) and interest of 1.4% per month on the average daily balance. Find the average daily balance, the monthly finance charge, and the account balance for the next billing. The average daily balance is $ The finance charge is $ The account balance for the next billing us $

Solution

solution. part A) ADB = (sum of daily amount / days in cycle) * interest per month.

sum of months daily amount = 467.18*3 + 363.78*5 + 227.48*7 + 148.58*6 + 38.58*6 - 13.53*4

= 5881.64

adb = (5881.64/31)*1.014*(31/30) = 198.79

part B) the finance charge is applied when money is credited(i.e. < 0) = applied for money 13.53*4 accordingly.

part C) next cycle balance = (467.18 + interest for 3 days) - 103.40),

= remaining balance + interest for 5days - 136.30 =( remaining balance + interest for 7) - 78.90

=(remaining balance+ interest) -  110

=(remaining balance+ interest) - 52.11 = answer.