Question
Using average daily balance method. Cuthbert has a credit card that computes the finance charge based on the Average Daily Balance method with an APR
Using average daily balance method.
Cuthbert has a credit card that computes the finance charge based on the Average Daily Balance method with an APR of 18%. He has a beginning balance of $1475 for the month of December. He charges $118.92 for groceries on 6 Dec, charges $32 for gasoline on 11 Dec, sends a payment of $300 which is received by the bank on 19 Dec, and charges $160 for gifts on 23 Dec.
a. What is the December ending balance, not including the finance charge?
b. What is the sum of the daily balances?
c. What is the average daily balance?
d. What is the finance charge for December?
e. What is the beginning balance for January, which is the December ending balance + the finance charge for December?
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