Calculate the monthly finance charge for the 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 answers to the nearest cent.)

$300 balance, 18%, $50 payment
(a) previous balance method
$

(b) adjusted balance method
$

(c) average daily balance method
$

Thank you

To calculate the monthly finance charge for each method, we'll need to follow the specific formulas for each method.

(a) Previous Balance Method:
The previous balance method calculates the finance charge based on the balance at the end of the previous billing cycle. To calculate it, we need to know the previous balance and the annual interest rate.

Monthly finance charge = (Previous balance * Annual interest rate) / 12

In this case, the previous balance is $300 and the annual interest rate is 18%. So, using the formula:

Monthly finance charge = (300 * 0.18) / 12 = $4.50

Therefore, the monthly finance charge using the previous balance method is $4.50.

(b) Adjusted Balance Method:
The adjusted balance method calculates the finance charge based on the balance after subtracting the payment made during the billing cycle. To calculate it, we need to know the previous balance, the payment amount, and the annual interest rate.

Monthly finance charge = (Previous balance - Payment) * (Annual interest rate / 12)

In this case, the previous balance is $300, the payment is $50, and the annual interest rate is 18%. Plugging in these values into the formula:

Monthly finance charge = (300 - 50) * (0.18 / 12) = $3.00

Therefore, the monthly finance charge using the adjusted balance method is $3.00.

(c) Average Daily Balance Method:
The average daily balance method calculates the finance charge based on the average daily balance throughout the billing cycle. To calculate it, we need to know the previous balance, the daily balances during the billing cycle, and the annual interest rate.

Daily balance = (Previous balance * Days in cycle) - (Payment * (Days in cycle - Days until payment) / Days in cycle)

Average daily balance = (Sum of daily balances) / Days in cycle

Monthly finance charge = Average daily balance * (Annual interest rate / 12)

In this case, the previous balance is $300, the payment is $50, the billing cycle is 30 days, and it takes 10 days for a payment to be received and recorded. Plugging in these values into the formula:

Daily balance = (300 * 30) - (50 * (30 - 10) / 30)
= 9000 - (50 * 20 / 30)
= 9000 - 33.33
= 8966.67

Average daily balance = 8966.67 / 30 = 298.89

Monthly finance charge = 298.89 * (0.18 / 12) = $4.48

Therefore, the monthly finance charge using the average daily balance method is $4.48.

Note: The values are rounded to the nearest cent, so the actual answers could differ slightly due to rounding procedures.

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