SOLUTION: Calculate the average daily balance (in $) for October for a revolving credit account with a previous month's balance of $110 and the following activity. (Round your answer to the
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Question 1173027: Calculate the average daily balance (in $) for October for a revolving credit account with a previous month's balance of $110 and the following activity. (Round your answer to the nearest cent.)
Oct 3: cash advance = $50
Oct 7: payment = $75
Oct 10: purchase = 29.59
Oct 16: credit = $30
Oct 25: purchase = $123.60
average daily balance = $ _____
My example had an annual percentage rate to work with and this one doesn't have one to work with. So not sure what to do without the annual percentage rate. Answer by CPhill(1987) (Show Source):
You can put this solution on YOUR website! Let's calculate the average daily balance for October:
**1. Determine the Daily Balances:**
* **Oct 1-2:** Balance = $110 (2 days)
* **Oct 3-6:** Balance = $110 + $50 = $160 (4 days)
* **Oct 7-9:** Balance = $160 - $75 = $85 (3 days)
* **Oct 10-15:** Balance = $85 + $29.59 = $114.59 (6 days)
* **Oct 16-24:** Balance = $114.59 - $30 = $84.59 (9 days)
* **Oct 25-31:** Balance = $84.59 + $123.60 = $208.19 (7 days)
**2. Calculate the Sum of Daily Balances:**
* (2 * $110) + (4 * $160) + (3 * $85) + (6 * $114.59) + (9 * $84.59) + (7 * $208.19)
* $220 + $640 + $255 + $687.54 + $761.31 + $1457.33 = $4021.18
**3. Divide by the Number of Days in October (31):**
* $4021.18 / 31 = $129.71548387
**4. Round to the Nearest Cent:**
* $129.72
**Answer:**
The average daily balance is $129.72.
