John has a credit card with a 18% rate and uses the average daily balance method. His average daily balance was $285.26, he made $6483.76 in purchases and paid $538.08. His previous balance was $367.69. What is his new balance?
To find John's new balance, we can follow these steps:
1. Calculate John's average daily balance: The average daily balance is the average amount of money John had on his card during the billing cycle. In this case, his average daily balance is given as $285.26.
2. Calculate John's interest charge: To calculate the interest charge, we need to multiply John's average daily balance by his annual interest rate. In this case, the interest rate is 18% (or 0.18 in decimal form). So, we multiply $285.26 by 0.18 to find the interest charge.
Interest charge = $285.26 * 0.18 = $51.35
3. Calculate John's new balance: To find the new balance, we need to add the interest charge, purchases, and any fees, then subtract any payments made. In this case, John made $6483.76 in purchases, paid $538.08, and had a previous balance of $367.69.
New balance = Previous balance + Purchases + Fees - Payments + Interest charge
= $367.69 + $6483.76 - $538.08 + $51.35
After performing the calculations, John's new balance is obtained.
Please note that if there are any additional fees or adjustments mentioned in the question, they should be included in the calculation of the new balance accordingly.