To calculate the daily balances and their sum, set up a chart like the one below that lists the activity in the account by dates and number of days. Dates March 1-6 March 7-9 March 10-11 March 12-16 March 17-22 March 23 Number of Days Activity/Amount 6 Previous balance Charge +$125.11 2 Charge +21.25 5 Payment -75.00 6 Credit -54.10 1 Charges +79.00 +19.43 8 Charge +94.19 31 days in cycle Unpaid Daily Balances Balance (unpaid balance x days) $215.60 $1.293.60 340.71 1,022.13 363.96 727.92 288.96 1.444.80 234.86 1,409.16 March 24-31 333.29 427.48 333.29 3,419.84 Total 9,650.74 Step 3 Average daily balance = Sum of the daily balances 9,650.74 = $311.31 Days in billing cycle 31 Step 4 The periodic rate is 1.25% (15% = 12). Finance charge = Average daily balance X Periodic rate Finance charge=311.31 .0125 = $3.89 Payments and credits Step 5 New Previous + Finance Purchases and + balance balance charge cash advances New = $215.60 + $3.89 + $340.98 balance New $431.37 balance $129.10 Problem 3. Find Example 2 in Chapter 13, section I, in your textbook. Use the strategy given in the example to calculate the finance charge for the following credit card statement. John Public has a Bank of America account with an annual percentage rate of 15%. His previous month's balance is $214.90. During July, John's account showed the following activity. DATE TRANSACTION CHARGES 07/06 Royal Cleaners $35.50 07/09 Payment -$40.00 07/15 Macy's $133.25 07/16 Antonio's Restaurant $41.10 07/21 CVS Pharmacy $29.00 07/27 CVS Pharmacy (credit) -$9.12 Use the example as a guide to show your work