Marsha must have surgery and she does not have the $2,700 cash necessary for the operation. Talking to an administrator at the hospital, she finds that it will accept MasterCard, VISA, and Discover credit cards. All of these credit cards have an APR of 13%, so she figures that it does not matter which card she uses, even though she plans to take a year to pay off the loan. Assume that Marsha makes a payment of $350 and then receives a bill. Show the interest from credit cards of 13% APR according to the previous balance, adjusted balance, and average daily balance methods. Assume that the month has 31 days and that it takes 14 days for Marsha's payment to be mailed and recorded. (Round your answers to the nearest cent.)

previous balance method

$ . 29.25

adjusted balance method

$ . 25.46

average daily balance

$ ....???

I can't figure out average daily balance. the answer i'm getting is 26.36, which is wrong.

please tell me where i did wrong.

10x2700 + 20x2350 = /30= * .13 * 30/365=25.36

To calculate the average daily balance using the average daily balance method, you need to consider the balances for each day of the billing cycle. Here's how you can calculate it correctly:

1. Determine the starting balance: Marsha starts with a balance of $2,700.

2. Calculate the daily balances: For each day of the billing cycle, calculate the balance based on the previous day's balance, any new charges or payments made, and the number of days involved.

- Day 1: Balance = $2,700
- Day 2 (after Marsha's payment): Balance = $2,700 - $350 = $2,350
- Day 3-31: Balance = $2,350

3. Add up the daily balances: Sum up all the daily balances calculated in step 2.

($2,700 + $2,350 * 29) = $68,100

4. Divide the sum by the number of days in the billing cycle (31 in this case) to get the average daily balance.

Average Daily Balance = $68,100 / 31 ≈ $2,197.42

So, the average daily balance according to the average daily balance method would be approximately $2,197.42.

Please note that in your previous calculation, you mistakenly used the same balance of $2,350 for all days, instead of accounting for Marsha's initial balance and the daily balances.