Posted by AR on Thursday, January 7, 2010 at 9:39am.
I do not know of any store that computes finance charges on an average daily balance basis. It is usually based upon the unpaid balance at the end of the month. You don't say whether the 2% is a daily or monthly rate.
They probably want you to take 2% of the average balance for the month. That average balance is
(11/30*225) + (6/30*262.22) + (14/30*297.33) = 272.60
2% of that is $5.45
what is -90 + 5
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Add five to -90. You will get a less negative number.
Calculate the monthly finance charge for the following credit card transaction. Assume that it takes 10 days for a payment to be received and recorded and that the month is 30 days long. (Round your answer to the nearest cent.)
$3,000 balance, 21% rate, $150 payment, average daily balance method
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