Use average daily balance method to answer the questions based on the information given.
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 average daily balance for the account? what is the finance charge if the annual rate is 18%? what is the new account balance?
average daily balance
finance charge
new balance

Average daily balance is $ 1.809,

Finance charge is $ 0.76

New balance is $ 55.54

Step-by-step explanation:

Given,

The original account balance = $ 50.51,

After paying $15.00,

New balance = 50.51 - 15 = 35.51,

Again after spending $19.27,

Final balance = 35.51 + 19.27 = 54.78,

∵ Number of days = 25,

So, the average daily balance =

= $ 1.809

Finance charge annual rate = 18% = 0.18

⇒ Finance charge monthly rate =

Thus, the amount of finance charge =

= $0.75765

≈ $ 0.76

New balance = total balance + finance charge = 54.78 + 0.76 = $ 55.54