19.07.2022 - 13:59

# The activity on Denise Hellings’ Sears account for one billing period is shown below. Find the average daily balance and the finance charge if the billing period is March 1 through March 31, the previ

Question:

The activity on Denise Hellings’ Sears account for one billing period is shown below. Find the average daily balance and the finance charge if the billing period is March 1 through March 31, the previous balance was $157.65, and the annual simple interest rate is 21%.  March 5 payment$25.00 March 17 tools $37.87 Answers (1) • April 7, 2023 в 05:15 To find the average daily balance, we need to calculate the balance at the end of each day in the billing period, add them up, and divide by the number of days in the billing period. March 1 - Previous balance:$157.65 March 2 - Balance: $157.65 March 3 - Balance:$157.65 March 4 - Balance: $157.65 March 5 - Payment: -$25.00, Balance: $132.65 March 6 - Balance:$132.65 March 7 - Balance: $132.65 March 8 - Balance:$132.65 March 9 - Balance: $132.65 March 10 - Balance:$132.65 March 11 - Balance: $132.65 March 12 - Balance:$132.65 March 13 - Balance: $132.65 March 14 - Balance:$132.65 March 15 - Balance: $132.65 March 16 - Balance:$132.65 March 17 - Purchase: $37.87, Balance:$170.52 March 18 - Balance: $170.52 March 19 - Balance:$170.52 March 20 - Balance: $170.52 March 21 - Balance:$170.52 March 22 - Balance: $170.52 March 23 - Balance:$170.52 March 24 - Balance: $170.52 March 25 - Balance:$170.52 March 26 - Balance: $170.52 March 27 - Balance:$170.52 March 28 - Balance: $170.52 March 29 - Balance:$170.52 March 30 - Balance: $170.52 March 31 - Balance:$170.52 To find the average daily balance, we add up all the balances and divide by the number of days in the billing period: (157.65 x 4) + (132.65 x 19) + (170.52 x 8) = 4,417.54 Average daily balance = 4,417.54 / 31 = $142.51 Now that we have the average daily balance, we can calculate the finance charge. We need to first find the interest rate for the billing period by dividing the annual interest rate by the number of days in a year: 21% / 365 = 0.0575 We then multiply the daily balance by the daily interest rate to get the daily finance charge:$142.51 x 0.0575 = $8.19 Finally, we multiply the daily finance charge by the number of days in the billing period to get the total finance charge:$8.19 x 31 = $253.89 Therefore, the average daily balance is$142.51 and the finance charge for the billing period is \$253.89.