SOLUTION: Suppose the charge account of Strong's Mailing Service at the local supply store had a 1.8% interest rate per month on the average daily balance. Find the average daily balance
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Question 1135816: Suppose the charge account of Strong's Mailing Service at the local supply store had a 1.8% interest rate per month on the average daily balance. Find the average daily balance if Strong's had an unpaid balance on March 1 of $129.70 a payment of $30 posted on March 12, and a purchase of $25.80 posted on March 21. The billing cycle ends on March 31
Type an integer or decimal rounded to the nearest hundredth as needed.)
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
unpaid balance on march 1 = $129.70
payment on march 12 = $30.00
purchase on march 21 = $25.80.
billing cycle ends march 31.
total days in billing cycle is from march 1 to march 31 inclusive for a total of 31 days.
balance of $129.70 from march 1 to march 11 inclusive for a total of 11 days equals total balance of 11 * $129.70 = $1426.7.
balance of $129.70 - $30.00 = $99.70 from march 12 to march 20 inclusive for a total of 9 days equals a total balance of 9 * $99.70 = $897.30.
balance of $99.70 + $25.80 = $125.50 from march 21 to march 31 inclusive for a total of 11 days equals a total balance of 11 * $125.50 = $1380.5
total daily balance for the billing cycle was $1426.7 + $897.30 + $380.5 = $3704.50.
average daily balance for the billing cycle was $3704.50 / 31 = $119.50.
here's a reference on average daily balance.
http://college-cram.com/study/businessmath/consumer-credit-and-banking/average-daily-balance/
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