The account balance on April 1st is $50.51. On April 15th a payment of $15.00 is made. On April 25th a purchase of $19.27 is made. What is the finance charge if the annual rate is 18%?

To calculate the finance charge, we need to determine the average daily balance for the period between April 1st and April 15th (when the payment is made), as well as the period between April 16th and April 25th (when the purchase is made).

Let's break it down step by step:

1. Find the number of days between April 1st and April 15th. In this case, there are 14 days.
2. Calculate the average daily balance for this period. The account balance on April 1st is $50.51. Since no additional transactions occurred during this period, the average daily balance would be the starting balance of $50.51.
Average Daily Balance (April 1st to April 15th) = $50.51
3. Find the number of days between April 16th and April 25th. In this case, there are 10 days.
4. Calculate the average daily balance for this period. The account balance on April 15th after the payment is made is ($50.51 - $15.00) = $35.51. Since no further transactions occurred during this period, the average daily balance would be $35.51.
Average Daily Balance (April 16th to April 25th) = $35.51
5. Add together the average daily balances for these two periods.
Total Average Daily Balance = $50.51 (April 1st to April 15th) + $35.51 (April 16th to April 25th)
Total Average Daily Balance = $86.02
6. Calculate the finance charge by multiplying the total average daily balance by the annual interest rate and dividing it by 365 (to get the daily interest rate).
Finance Charge = (Total Average Daily Balance * Annual Interest Rate) / 365
Finance Charge = ($86.02 * 0.18) / 365
Finance Charge ≈ $0.0424 (rounded to the nearest cent)

Therefore, the finance charge is approximately $0.0424.