I have a revolving credit account that uses the aerage daily balance to calculate finance charges. during april 2007 ( amonth with 30 days) I had an unpaid balance of $445.12 for 18 days and a unpaid balance of $221.38 for 12 days . How do you calculate the average daily balance for april 2007?
To calculate the average daily balance for April 2007, you need to find the sum of the product of each daily balance and the number of days it was unpaid, and then divide by the total number of days in the month (30 in this case).
Here's how you can calculate it step by step:
1. Calculate the product of each daily balance and the number of days it was unpaid:
- For the first balance of $445.12 for 18 days, the product is $445.12 x 18 = $8012.16.
- For the second balance of $221.38 for 12 days, the product is $221.38 x 12 = $2656.56.
2. Add the products from step 1: $8012.16 + $2656.56 = $10668.72.
3. Divide the sum from step 2 by the total number of days in April (30): $10668.72 / 30 = $355.62.
Therefore, the average daily balance for April 2007 is $355.62.