SOLUTION: Average Daily Balance: Amount; $1928 (Previous Balance) Interest Rate; $19.74% (yearly) 30 Days in Billing Cycle $150 payment on 15th of month Explain how to calcula

Question 1200647: Average Daily Balance:
Amount; $1928 (Previous Balance)
Interest Rate; $19.74% (yearly)
30 Days in Billing Cycle
$150 payment on 15th of month
Explain how to calculate.
Answer by GingerAle(43) (Show Source): You can put this solution on YOUR website!
**1. Calculate the Balance Before Payment:**
* **Days with the full balance:** 15 days (from day 1 to day 15)
* **Balance for these days:** $1928
* **Total balance for this period:** $1928 * 15 days = $28,920
**2. Calculate the Balance After Payment:**
* **Payment amount:** $150
* **New balance after payment:** $1928 - $150 = $1778
* **Days with the reduced balance:** 15 days (from day 16 to day 30)
* **Total balance for this period:** $1778 * 15 days = $26,670
**3. Calculate the Total Balance for the Billing Cycle:**
* **Total balance:** $28,920 (before payment) + $26,670 (after payment) = $55,590
**4. Calculate the Average Daily Balance:**
* **Average Daily Balance:** Total balance / Number of days in the billing cycle
* **Average Daily Balance:** $55,590 / 30 days = $1853
**Therefore, the average daily balance for the billing cycle is $1853.**
**Note:**
* This calculation assumes that the payment was made exactly on the 15th day of the billing cycle.
* Credit card companies may use slightly different methods for calculating the average daily balance, so it's always a good idea to refer to your specific credit card agreement for accurate information.

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